Am I required to deduct mortgage interest on schedule E, or can I deduct it all on personal deductions? I own my primary residence but rent rooms out.

Forum|Forum|1 year ago
January 15, 2025
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I found my return is much higher if I deduct all of my mortgage interest on the personal deductions section. If I enter the mortgage interest deduction under schedule E (accounted for how much of the home I rent out) and the remainder on the personal deductions section, the overall return is much lower. I cannot find information that states if I am required to deduct the portion of mortgage interest under Schedule E, or if I am allowed to deduct it all under personal deductions.

Mike9241

this forum has no access to your return, so we can't see what is happening. is there a passive loss limitation form 8582 which would make some of the interest currently non-deductible. if yo are taking the 199A/QBI deduction it is inflated

From my standpoint allocating some portion of expenses like utilities and real estate taxes to the rental but not mortgage interest would be an imconsistent accounting method that could be challenged by the iRS.

this is what I found on a web search but there is no source for this.

"You must split any expenses – mortgage interest, mortgage insurance premiums, and real estate taxes – between the rented portion of your home and the unrented part. You can also deduct expenses that are normally not deductible, like electricity and qualified home improvement projects."