How is rental income taxed when you have a mortgage?

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  • December 29, 2023 at 9:14 pm #29010
    Geoff Massanek
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    Your rental income is taxed as regular income when you own a mortgaged property and are getting rental income from it every month. Advance rent and non-refundable security deposits are also included in this. You can’t use the mortgage principal to write off rental income. The principal gets added to the property’s basis. 

    The mortgage interest and insurance premium, on the other hand, can be used to reduce taxable rental income through mortgage interest deduction. You cannot claim this, however, if you live on the property for some time. That is, if you live on the rental property for three months, you cannot claim a mortgage interest deduction for those three months.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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