If I make more than $150k, can I still deduct mortgage interest on a rental property?
April 28th, 2010 | 
Author: I recently sold mу home аnd аm now renting mу fundamental residence. I’m considering buying a rental property tο hеlр defer taxes. Someone recently tοld mе thаt I shouldn’t bесаυѕе mу income level ($200k+) disqualifies mе frοm deducting thе interest οn thе rental property. Iѕ thаt rіght?
Posted in Rental Properties
I don’t believe that’s right but check with a tax person/service first to make sure.
Yes it’s right. You can’t deduct finance interest on a rental property.
question your tax man
I don’t reckon It is smart to living an renting place and buy a property for rent to collect rent and save tax.Because you pay rent for your fundamental residence,and the rent you can’t get any takeout from tax .Your rental property like do business the taxable income is equal rental income take out of tax,insurance,maintain fee and finance interest despite how much you make from other place.When you later to sell this property and if you gain then consider all taxable.If you use it as fundamental residence most case your gain are not taxable if under some limited and are first time.
This is how it works with rental properties. You will have to file Schedule E, showing your rental income, and any expenses you have related to it (finance interest, property taxes, repairs, maintenance and depreciation). If the resulting amount is a loss and you make more than $150,000 AGI, the loss has to be carried forward to future tax years or offset against any other passive income (ie. income from a partnership etc). In the year in which you sell the property, you can then offset the accumulated losses, or you use some of the losses in years in which your income falls below $150,000.
Make sure you claim depreciation only on the building value of your property, not the land part.