What if I had mortgage interest on a second (or vacation) home?
The Home was NOT Rented Out
Menu Path: Deductions/Credits > Itemized Deductions > Homeowner Expenses (1098)
You may include your mortgage interest as an itemized deduction on the Homeowner Expenses screen. Your mortgage interest may be limited.
The Home was Rented Out
Menu Path: Income > Business / Rental Income > Rental Income (Schedule E)
In order to deduct some or all of your mortgage interest as an itemized deduction you must have lived in your second home the longer of:
For example, if you owned a vacation home on the coast and lived in it for 25 days of the year and rented it out for 75 days you could deduct 25% of your mortgage interest as an itemized deduction (25 days personal use / 100 days total use). So if you had $10,000 of mortgage interest, you would enter $2,500 of your mortgage interest on the Homeowner Expenses screen. You would enter the remaining $7,500 as Mortgage Interest Paid to Banks on the Rental Expenses screen.
If you didn't live in the home long enough to meet the 15 day or 10% requirement, you will need to enter all your mortgage interest as a rental expense on the Rental Expenses screen.
Menu Path: Deductions/Credits > Itemized Deductions > Homeowner Expenses (1098)
You may include your mortgage interest as an itemized deduction on the Homeowner Expenses screen. Your mortgage interest may be limited.
The Home was Rented Out
Menu Path: Income > Business / Rental Income > Rental Income (Schedule E)
In order to deduct some or all of your mortgage interest as an itemized deduction you must have lived in your second home the longer of:
- 15 days OR
- More than 10% of the days the home was rented to others.
For example, if you owned a vacation home on the coast and lived in it for 25 days of the year and rented it out for 75 days you could deduct 25% of your mortgage interest as an itemized deduction (25 days personal use / 100 days total use). So if you had $10,000 of mortgage interest, you would enter $2,500 of your mortgage interest on the Homeowner Expenses screen. You would enter the remaining $7,500 as Mortgage Interest Paid to Banks on the Rental Expenses screen.
If you didn't live in the home long enough to meet the 15 day or 10% requirement, you will need to enter all your mortgage interest as a rental expense on the Rental Expenses screen.
