What is the name of your state? California
We own a duplex in California, in which we live in one part and rent the remaining 1/3 of the property as a separate apt. On our federal taxes return, we take 1/3 of our property taxes and mortgage interest as rental expenses, and the remaining 2/3 as Schedule A deductions off our regular income. It is my understanding that this is the ordinary way of assigning these expenses and deductions.
With the expenses in Calif of mortgage interest and property taxes, we are showing a net loss on the rental income. However, as our adjusted gross income is over $150,000 we cannot take this passive loss against other non-passive income sources, so it is carried forward until we have a profit we can subtract it from. (We don't have any other passive income sources).
My question is: Can I take the entire mortgage interest and prop tax payments as personal income deductions, rather than rental expenses? That way I will see some immediate reduction in my taxes, versus some future tax reduction for my rental profits.
Is this “legal,” or even sensible?
Your wisdom is appreciated.
We own a duplex in California, in which we live in one part and rent the remaining 1/3 of the property as a separate apt. On our federal taxes return, we take 1/3 of our property taxes and mortgage interest as rental expenses, and the remaining 2/3 as Schedule A deductions off our regular income. It is my understanding that this is the ordinary way of assigning these expenses and deductions.
With the expenses in Calif of mortgage interest and property taxes, we are showing a net loss on the rental income. However, as our adjusted gross income is over $150,000 we cannot take this passive loss against other non-passive income sources, so it is carried forward until we have a profit we can subtract it from. (We don't have any other passive income sources).
My question is: Can I take the entire mortgage interest and prop tax payments as personal income deductions, rather than rental expenses? That way I will see some immediate reduction in my taxes, versus some future tax reduction for my rental profits.
Is this “legal,” or even sensible?
Your wisdom is appreciated.
