Discussion:Mortgage interest switching from Sch E to Sch A
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Discussion Forum Index --> Tax Questions --> Mortgage interest switching from Sch E to Sch A
Vermontcpa (talk|edits) said: | 29 June 2007 |
| Question on mortgage interest for rental properties on sch e... assume MFJ taxpayer has AGI in excess of $150k so rental losses are non allowable and are carried forward to future tax years... is it compliant if you take the amount of mortgage interest from Sch E that is creating the additional unallowable loss and put in Sch A where the benefit is realized in the same tax year?
The math of it is simple but is this okay to do on sch a? | |
| 29 June 2007 | |
| No - think of the tracing rules Reg. 1.163-8T. | |
| 29 June 2007 | |
| I think you are out of luck. Client would have to use the property in order to claim on Schedule A as Qualified Mortgage Interest.
If claiming interest as investment interest, rents collected would have to "incident" to holding property - rents collected less than 2% of lower of unadjusted basis or FMV. | |
Michaelstar (talk|edits) said: | 29 June 2007 |
| Please take some tax classes in the off season. It might even be good if you worked part time for a CPA firm in the tax department or concepts like this are going to get you into trouble and you'll loose clients in the end which is not good for business. | |
Death&Taxes (talk|edits) said: | 29 June 2007 |
| You can help your clients by explaining that sometimes it can pay to use a rental property personally in excess of 14 days a year, if the situation warrants. Obviously this does not work if the property is rented twelve months, but for seasonal rentals it can help, especially when the client only owns a residence and the rental property. While classes are excellent, I've found better insight on issues like this in workbooks like PPC's High Income Taxpayers book. | |
Michaelstar (talk|edits) said: | 29 June 2007 |
| D&T - I agree with the PPC's series. In the back of each of these series is CPE that relates to the material on the specific topics covered. I find these helpful and it forces one to read the material if motivation is actually needed. | |
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