Mortgages can be considered money loans that are specific to property. If they are incurred for the purpose of earning income by renting property to tenants, the interest portion of the mortgage is deductible on line 8710 (Interest and bank charges) of the T776 Rental Income form. Only the interest portion of the mortgage is deductible, and the interest is only deductible in the original term of the loan.
TurboTax Online:
Step 1) Go to Find and type: Rental Summary and click Go.
Step 2) Edit the information if you already inserted or Enter New Rental Income.
Step 3) Enter the information in the Real Estate Rentals Statement and click Continue.
Step 4) Select the checkboxes that apply to your situation (don't forget Rental Expenses) in the Rental Profile and click Go
Step 5) In the form T776 Rental Expenses enter the Interest amount
Step 6) Click Continue to save your entries.
For more information about the entry of office expenses, please see our TurboTax article/video The Landlord’s Toolbox: A Guide to Claiming Expenses on Rental Properties
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