INTEREST ON RENTAL OF SECOND HOME
You may have a second home. Be aware that if a residence is held out for rental any time during the year, the dwelling is not considered a second home and deductible on Schedule A unless it is used for personal purposes more than the greater of 14 days or 10% of the days the unit is rented at fair rental value.
Instead deduct the interest allocated to rental use as a rental expense of Schedule E, which may be subject to passive activity loss limits.
In general, qualified mortgage interest and real estate taxes if allocated against rental income and if this creates a rental loss, then this would be allowed in full for mixed-use property on Schedule E and carried as a deduction on Form 1040.
The above information is of a general nature only and should not be relied upon for specific situations.
Call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730 as required to set up an appointment.