I just had my taxes done, I own 2 houses and 1 is a rental?

Question

I thought you could write off your total mortgage payment when you rent a house, especially when your mortgage is higher than what you get from the renter, my tax guy said only the interest is a write off is this true?? and of course all the expences are a write off also.

Answer 1

He's right, you can't write off the total mortgage. The part of the payment that is principal is building your equity in the house.

Answer 2

Your tax guy is correct. The mortgage interest paid on your personal residence is deducted on Schedule A.

If you have a second home that you rent out for part of the year, you must use it for more than 14 days or for more than 10 percent of the number of days you rented it out at fair market value (whichever number of days is larger) for the home to be considered a second home for tax purposes. If you use the home less than the required number of days, your home is considered a rental property, not a second home. That means the interest is not deductible as personal mortgage interest on Schedule A, although part or all of it is deductible to offset rental income on Schedule E.

Answer 3

your tax guy is correct, you can deduct only the interest portion of your mortgage payment, not the principal.