Itemized deduction for partial rental
I have a 5 bedroom home and want to rent out 3 bedroom, but i won't live in the other 2 rooms, just keep them vacant and rent a different place. I live in california and my mortgage is around 850k. I am wondering how will by itemized deduction will look like in that case. I earn 400k per year.
Quick Answer:
Since you will not reside in your 5-bedroom home and will rent out 3 bedrooms while keeping the remaining 2 vacant, the entire property is generally treated as a rental property for tax purposes.
This changes how your mortgage interest and property taxes are handled. They will no longer be itemized deductions on Schedule A. Instead, these expenses will be reported on Schedule E, *Supplemental Income and Loss*, as ordinary and necessary business expenses to offset your rental income. This also means the $750,000
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
