In article <e03b2d8b-983d-4812-9692-c256c1331e73[at]g38g2000yqn.googlegroups.com> ,
<rjmalinak[at]aol.com> wrote:
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So total mortage interest is $80k.

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77% of $80k = $61.6k.

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Schedule E gets $31k.

Schedule A gets $6k (rental) + $43k (home) = $49k. Since that's less
than the limit, it stays there.

Seth

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There are two properties and two different mortgage loans obtained
when each of the properties was purchased. The combined mortgage debt
is $1.3M. The interest on the vacation home is $37k of which $31k can
go to schedule E based on the rental % (that leaves $6k for Sched A).
The mortgage interest on the primary home is $43k. According the Pub
936, interest expense on mortgage debt is limited as follows: $1.0M/
$1.3M=77% so only 77% of the total interest can be deducted on Sched
A. Since part of the $37k of the interest went to Schedule E, is the
77% applied to the $43k interest on the primary home, or only on the
$6k which is the personal portion of the vacation home??? or to both
the $43k and the $6k???

Thanks.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

rjmalinak[at]aol.com wrote:
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You have a single mortgage legally secured by two different properties?
Or did you use the cash proceeds of an equity refinance on one
property to acquire the other?


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You figure out the mortgage expense on the rental that is a deduction
against rental income, then carry the remainder to Schedule A and apply
the various deductibility limits there.


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Fill out Schedule E before Schedule A, then indicate where you are stuck.

-Mark Bole

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Say a taxpayer owns a home and a vacation home and carries $1.3M in
mortgage debt on both properties combined. He is not a real estate
professional, and rents his vacation home during the summer. He uses
the home for personal use the greater of 14 days or 10% of the days it
is rented. How should he go about deducting his mortgage interest? I
have read Pub 936 and 527 don't really understand how to follow the
rules as established in Pub 936 and at the same time deduct the
interest as stated in Pub 527 because there is more than $1M in
mortgage debt here. Is the interest on the $300k not deductible in
either Sched A or Sched E???

Thanks!

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >