Taxpayer rents a portion of his house out and allocates a pro-rated portion of his mortgage and property taxes to the rental. The rest of his property tax and mortgage goes on schedule A with his itemized deductions. With the pro-rated mortgage and property tax included, the rental results in a net loss. But if you take out the mortgage and property tax allocation (which he would have reported in full on schedule A in the absence of the rental), the rental results in positive income. Does the IRS consider this rental to be profitable?
- posted
10 years ago