Hi -

I have gone on sabbatical from my job as a professor and rented out my house while I'm gone. As I understand it, my mortgage interest is to be used as an expense on the rental for the portion of the year I was away, while the portion of my mortgage interest applicable to the time I was living in my home is what I can deduct in my itemized deductions. Is this a correct understanding? My mortgage interest statement from my bank makes no distinction, of course, and gives simply the full 12 month amount. That fact doesn't change what I can and cannot itemize, correct?

False numbers here, but just to see if I'm getting this correct:

Mortgage interest paid to bank, per their 1098: $12000

Months in residence of home: 5
Months home occupied by tenants: 7
Months in residence out of state: 7
Rent paid by tenants: $8000

In my schedule E form, then, I believe I should have an entry for $8000 paid by the tenants in rent as rent income, and $7000 in expenses, the 7/12 of the $12000 paid by me in mortgage interest.

Thus my net rental income - expenses, assuming I had no maintenance costs, etc., would be $1000.

Then in my itemized deductions, I should deduct not $12000, but $12000 less the $7000, that is, the $5000 of mortgage interest that should be allocated to the time we were actually living in our home.

Is this correct?

Thanks,

Todd