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> You can not write off the interest on a house that is strictly an income property. That is not correct. The article you posted seems to imply it, but it is a
by quesera 10y ago
> You can not write off the interest on a house that is strictly an income property.
That is not correct. The article you posted seems to imply it, but it is absolutely not true.
Pure rental property is treated as a business property, and mortgage interest on business properties is an expense that is deducted from rental income before determining tax liability. You can even carry a net loss over to your personal return (subject to some limits).
Details in IRS pub527: https://www.irs.gov/publications/p527/ch01.html https://www.irs.gov/publications/p527/ch01.html
- bogomipz 10y agoOh sorry that sentence was meant to be "you can not write off 100% of the interest that is an income property." For instance if you have bought a property as a pure investment property and the total mortgage + interest is being covered by the tenants monthly rent. You can not then write off that interest at 100% since you are not actually incurring that interest payment yourself correct?
- gigatexal 10y agoIncorrect. Interest expense is a line item that is deducted from the company's tax burden. It's the same with a rental regardless if everything is being covered.
- deleted 10y ago[deleted]
- deleted 10y ago[deleted]
- bogomipz 10y ago>"Incorrect. Interest expense is a line item that is deducted from the company's tax burden." We weren't discussing a company though, we were discussing one's personal income tax filing.
- quesera 10y ago100% of mortgage interest on personally-owned rental properties is deductible. Mortgage interest is itemized just like any other cost incurred, e.g. maintenance, utilities, advertising, property taxes, etc. The net profit/loss on the Schedule is then applied to your personal return. You might be limited in the size of loss you can apply, but that's an unrelated calculation.