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Can I Deduct Mortgage Interest on a Rental Property?

You can claim the home mortgage interest deduction on your main home and a second home, but what about rental properties?

By
Laura Adams, MBA
1-minute read

Q. My daughter is at college and I want to buy a house for her to live in. If I rent out the extra bedrooms to roommates, can I still deduct my mortgage interest paid on the house?

A. You can claim the home mortgage interest deduction on your main home and a second home. However, if you rent out your second home and don’t live in it for part of the year, then it must be treated as a rental property for tax purposes.

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In most cases, the expenses of renting a property—such as mortgage interest, property taxes, insurance, advertising, and maintenance—can be deducted from your rental income. This offsets and reduces your taxable income, which is a good thing!

You report income and expenses for a rental on Schedule E (Form 1040).Take a look at IRS Publication 527, Residential Rental Property for more information and a complete list of tax-deductible rental expenses.

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.