I have a rental unit on my property that is included with my mortgage. Can I claim that percentage of the mortgage as a deduction (based on square footage) or just the mortgage interest? (FYI: Yes I do have a tax professional but she is unavailable for a few days and I would just like to know for planning purposes). Thanks!!!
Only the interest is deductible. Principal paid is never a deduction.
However…..
You depreciate the property and get a tax deduction for the original cost (plus improvements) over time. The net effect is similar to deducting principal.
just the interest
you are taking depreciation on the value of the rental which is what your mortgage principle is paying for the–the value of the asset
you need to determine the square footage comparison to the entire footage to determine the rentals’ %