What is the name of your state? Illinois
I own a house. I am renting my basement out to a tenant for $250/month, which I calculated to be 1/3 of the total house, by floor surface area. As a result, 1/3 of my mortgage is tax deductible as is 1/3 of my utilities.
However, as interest on my mortgage is always entirely tax deductible (whether or not I was renting out my basement), I have to subtract out the interest paid from my total house payments, itemize the total interest as one deduction, then itemize 1/3 of my remaining mortgage as another deduction.
Here's a stupid question: Is property tax always tax deductible as well, in the same way as mortgage interest is always tax deductible?
If so, then the entire amount I paid in property tax can be deducted, otherwise, only 1/3 of the amount can be deducted as a business expense for renting out the basement.
I own a house. I am renting my basement out to a tenant for $250/month, which I calculated to be 1/3 of the total house, by floor surface area. As a result, 1/3 of my mortgage is tax deductible as is 1/3 of my utilities.
However, as interest on my mortgage is always entirely tax deductible (whether or not I was renting out my basement), I have to subtract out the interest paid from my total house payments, itemize the total interest as one deduction, then itemize 1/3 of my remaining mortgage as another deduction.
Here's a stupid question: Is property tax always tax deductible as well, in the same way as mortgage interest is always tax deductible?
If so, then the entire amount I paid in property tax can be deducted, otherwise, only 1/3 of the amount can be deducted as a business expense for renting out the basement.