how can you claim mortgage interest deduction on your third property?

Question

The limit for  interest deduction is 2 properties.I am sure many of you guys here pay mortgageson more then 2 properties...is there any way you can take deduction on your 3rd and 4th property?

Kyle Hipp · Answer

I think people seem to confuse "the mortgage interest deduction". This is what is talked about on the news all the time. This is for you personal and 2nd personal residence. In investment properties you are not claiming this deduction, you are claiming a deduction based on business expenses. Mortgage interest is an expense of running a rental business, just as are utilities and insurance.

At least this is the way I have looked at it. I know if I am off Steven will correct me ;)

David Beard · Answer

Steven -- you really gotta stop posting using your cell phone!!  Or get you one of those little mobile foldout keyboards, been meaning to do that myself.  Assuming you weren't referring to hotels, that is. :)

Sandy Blanton · Answer

VP, there's no limit of the number you can deduct as long as they're investment units.

Steven Hamilton II · Answer

Vaishal Patel,

You can deduct mortgage interest on any of your investment properties; however, it will not be deducted in the same manner as the deduction for your Primary and secondary residence.

Also: You can deduct the property taxes of any property you own; however, this may not be beneficial due to Alternative Minimum Tax.

David Beard,

I agree. Sometimes I'm trying to quickly answer something and it seems to backfire this way.

Kyle Hipp,

That is correct. your mortgage interest for your rental property is a business expense on Schedule E or Form 8825.

-Steven

Steven Hamilton II · Answer

You can deduct mortgage interest on any of your investment properties however if it is a third Residence Inn you cannot you definitely can't adopt the property taxes for each and every property that you own.

.-Steven

how can you claim mortgage interest deduction on your third property?

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