Message Font: Serif | Sans-Serif
No. of Recommendations: 1
My wife and I own a home which we purchased in mid-1998 and moved out of mid-2000. We immediately had renters move in. When filing this year, should we list ALL mortgage interest payments on Schedule E? Or should we split them between Schedule E and itemized deductions?

You split them according to the personal/rental use periods. A tip: if you're using software to prepare your return, lie to it when it asks you whether you used the rental property for personal use during the year. It really means did you use it after you converted it to rental.

Additional info:
1) We purchased the home with a VA loan.
2) We use a property manager to manage the day-to-day operations and maintenance.

Also, what is the procedure for depreciating the property? We plan on moving back into it sometime in the future.

Your basis for depreciation is the lesser of your basis in the property or its fair market value as of the date you put it into rental service. You may as well claim the depreciation expense in accordance with what Publication 527 tells you, because when you sell you'll have to recapture depreciation whether you took it or not.

Phil Marti
VITA Volunteer
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.