For rental property, Where do I entered the mortgage interest?

Question

I am a California resident. Do I entere the amount on Schedule A as well as Schedule E? Turbo tax ask me for the amount in both location. However, at the end, it seems that the total mortgage interest is higher than the amount received on my 1098.

I have a four-plex and I live in one of the units. For instance, if I paid interest of $20,000 for the year, do I report only $15,000 on Schedule E and report the $5,000 on Schedule A? Should I entered $20,000 on both questions for Turbo Tax to calculater the income for rental property as well as the 'credit' section for Turbo tax?

Please help me out with this? Is this also applicable for the property taxes paid during the year?

I appreciate your advice.

Answer 1

You will only report the total interest once, split between Schedule E and Schedule A. You are correct that if you paid $20,000 total and you lived in one part of the four-plex, then 75% ($15k) would go to Schedule E and 25% ($5k) would go to Schedule A. The same applies for real estate taxes.

You are also correct that you should NOT report the full amount both places within the program. TurboTax likely assumes that you will split the total interest yourself.

Answer 2

If it's mortgage interest on rental property, it goes on schedule E. If it's mortgage interest on your personal residence, it goes on schedule A. You don't take the same interest in both places. And yes, same answer for property taxes. Since you live in one of the four units and the other three are rental units, 1/4 of the total amount would go on schedule A, the other 3/4 on schedule E.

Answer 3

You put the interest paid on your mortgage on Schedule A, but put the rental income on Schedule E.