Do I Claim Mortgage Interest On Rentals?
Hi all, I am new to REI and I now have 2 rentals. Can I claim my mortgage interest on the rentals for my year end taxes? Any thoughts? Suggestions? Thank you in advance.
Hi all, I am new to REI and I now have 2 rentals. Can I claim my mortgage interest on the rentals for my year end taxes? Any thoughts? Suggestions? Thank you in advance.
From what I have read, yes you can. I've been at it less than a year so I cannot say for sure.
Yes
The loan interest is deductible.
The principle is not.
[addsig]
All expenses (except capital expenditures which must be depreciated) relating to your rental property may be used to offset rental income. These expenses include insurance, maintenance, supplies, real estate taxes, mortgage interest, etc.
They are treated as deductions for adjusted gross Income and are reported on Schedule E. In-addition, depreciation and the recovery of your rental property cost basis (minus a portion allocated to land) may be recovered over 27.5 years using the straight-line method of depreciation.
Another deduction I like is depreciation. Depending on the property you usually have spread it over 30 years. So if you had a property that you bought for $120,000 you would be able to deduct $4,000 each year until you sold it or 30 years comes along.