Rental Expense - partial year

Forum|Forum|1 year ago
March 9, 2025
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I have a basement apartment that I rent. In 2024, I had a renter from Jan - April

how do I enter the property tax and mortgage interest? do I simply divide by 12 and count 4/12ths?

Do I also list the full year mortgage interest and property tax for the main tax return?

AnnetteB6

First, you have to consider if the basement apartment was advertised and available to rent for the entire year, or was it only for the period of time that it was actually rented. Did you keep the space available and advertised for another renter or did you start using it personally as part of your home?

If it was available to rent all year, then you would enter a percentage of the mortgage interest and property tax as a rental expense that is proportional to the square feet of the space rented versus the whole home. For example, if the apartment was 500 square feet and your home is 2000 square feet, then 500/2000 or 25% of the mortgage interest and property tax would be a rental expense. The remaining 75% of the mortgage interest and property tax would be reported on your Schedule A Itemized Deductions.

If the property was only available to rent for the 4 months, then the math would be 4 months out of 12 months or one third of the 25% of the mortgage interest and property tax. All the remaining mortgage interest and property tax would be reported on Schedule A.

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