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11142: Schedule E - Duplex Mortgage Interest Not on Schedule A


1040 Individual Data Entry

A taxpayer whose main home is a duplex, and who rents out the other half, expects a mortgage deduction for his half of the duplex. I've entered the mortgage interest on screen E, and the business half flows to Schedule E, but nothing flows to Schedule A.

In Drake15 and prior, if you enter mortgage interest on screen E

  • as a direct expense for the business half of the duplex, you must enter the taxpayer's remaining portion of the interest where you want it.
  • as an indirect expense for the entire duplex, and you select the option This is your main home or second home, the taxpayer's portion of the mortgage interest (based on the % occupied by taxpayer field on screen E) will flow to Schedule A. If the option is not selected, you must enter the taxpayer's portion where you want it.

Starting in Drake16, when you enter mortgage interest on screen E:

  • in the Expenses attributable to rental unit column for the business half of the duplex, you must enter the taxpayer's remaining portion of the interest where you want it.
  • in the Expense attributable to entire property, and you select the option This is your main home or second home on the Property Info/Income tab of the schedule E screen, the taxpayer's portion of the mortgage interest (based on the Taxpayer or spouse occupancy percentage entered on the Expenses 5-19 tab of the schedule E) will flow to Schedule A. If the option is not selected, you must enter the taxpayer's portion where you want it.

See "Entering Expenses for Multi-Unit Rentals" in Related Links below.


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