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    mortgage insurance on rental

    I've googled, IRS'ed and searched here, but I still don't know how to capitalize mortgage insurance premiums on rental property.

    Is it depreciated? If so, for how long? I looked in The Tax Book, and can't find how to do this.

    I can read, if someone could direct me...

    Thanks~
    "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

    #2
    Possi,

    Originally posted by Possi View Post
    I've googled, IRS'ed and searched here, but I still don't know how to capitalize mortgage insurance premiums on rental property.

    Is it depreciated? If so, for how long? I looked in The Tax Book, and can't find how to do this.

    I can read, if someone could direct me...

    Thanks~
    Is the insurance paid for the entire year on the rental? If so, it's all deductible. If not, prorate what was paid for the year in question. I hope I understand the question.

    Peachie

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      #3
      Yes, one year at a time.

      Yes it is for that particular year.

      So, I only capitalize it if it is paid up front? That's not how I read it. I better read again in the morning.
      "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

      Comment


        #4
        You only

        Originally posted by Possi View Post
        Yes it is for that particular year.

        So, I only capitalize it if it is paid up front? That's not how I read it. I better read again in the morning.
        deduct what was paid. If you had the property in service for 8 months, you can only deduct 8 months or however many months you paid for that year. What does TTB say? It has been my Tax Bible all day and helped me. If you haven't paid the insurance-there's no deduction for it.

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          #5
          Insurance

          Originally posted by Peachie View Post
          deduct what was paid. If you had the property in service for 8 months, you can only deduct 8 months or however many months you paid for that year. What does TTB say? It has been my Tax Bible all day and helped me. If you haven't paid the insurance-there's no deduction for it.
          It does not specifically address Mortgage Insurance. I swear I read last night that mortgage insurance on rental property had to be capitalized. This morning, I can't find the source. I must be mistaken. Maybe I was looking at a topic where the insurance was paid up front, and not year to year.

          Thanks for keeping me on the right road, peachie!
          "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

          Comment


            #6
            googled

            This is what sent me up this road:
            Google search:

            Mortgage Insurance Premium Deductions



            The IRS allows taxpayers to deduct their monthly mortgage insurance premium payments in the same year they paid them if they used their homes as their principal residences. However, owners of investment or rental properties cannot deduct their mortgage insurance premiums in the same year but instead must capitalize them. The IRS requires taxpayers to capitalize their mortgage insurance premiums as passive activity losses or business losses incidental to their real estate investment activities.



            Read more: Can I Deduct Mortgage Insurance Premiums From Rental Property? | eHow.com http://www.ehow.com/info_10064233_ca...#ixzz1r50rkR3u
            "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

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