Vic Dura wrote:

- quote -

I vote for Sch E. I have several clients for whom we keep
allocation schedules - x% to investment interest, y% to Sch
A, z% to Sch E.

Phoebe

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Vic Dura wrote:

- quote -

If he elects out of Sch-A treatment, it's deducted on Sch-E.
This may or may not be a good idea, as if it's done, and
the second home is converted to personal use, then no part
of the interest on the loan is deductible.

On the other hand, if on Sch-A, is a home equity loan, and
limited to $100,000.

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vpdura[at]XXXhiwaay.net (Vic=A0Dura) posted:

- quote -

Seems straightforward to me: the mortgage is secured by the
homeowner's main home (personal residence), and is therefore
a Schedule A item.

If the taxpayer had secured a mortgage directly on the
rental property, then the interest payments would be an
expense item on Sch E.

Bill

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A homeowner (personal residence) owns the home free & clear
of loans and has lived in it many years. The HO then takes
out a mortgage on the personal residence and uses the funds
to purchase a single-family rental property. The HO receives
a 1098 at the end of the year showing interest paid.

Is the interest paid deducted on Sch-A or Sch-E?

Thanks for any comments.

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