I have a rental property and am trying to do my tax return for this year. I charge $1200/month in rent. Here are my calculations: Total rental income received ($1200 x 12): 14400 ($1200 x 12)
Minus Expenses: Mortgage interest: 6804 Insurance: 655 Miscellaneous repairs: 296 Real estate taxes: 1287 Total: 9042
Minus Depreciation: House: 1241 Total: 1241
Net rental income for rental: 4117
What I am wondering is how can this be considered income when I still have to pay the mortgage payments on the property? The $4117 is not money in my pocket. The monthly mortgage payment is $900 so I see where I have a positive income of $300/month, but what about the fact that I also have to pay for the mortgage payments. Why can't I call that an expense to be deducted from the rental income? I am also assuming that when I am asked the question (since I am using Turbo Tax) about any mortgages that I may have, I can't use the mortgage from the rental property on my personal itemized list of deductions since I have already expensed the interest and taxes on the schedule E. Or am I mistaken on this?