Home Page link  

Mortgage Insurance as Rental Expense

  
Groups | Search | About
User Password
Register Now! Lost Password?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Mortgage Insurance as Rental Expense DORFMONT@aol.com (Linda Dorfmo 01-13-2007
Posted by Arthur Kamlet on January 18, 2007, 3:42 am
Please log in for more thread options
>>> My client has a single family rental house which she has
>>> been renting out for many years. When she first got her
>>> mortgage she was charged private mortgage insurance because
>>> her down payment was not 20%. I have been deducting this
>>> insurance premium on her Sch. E. I recently got into a
>>> discussion with a mortgage broker friend who says that this
>>> premium is not deductible. After scouring the IRS sites and
>>> the publication on rental property I have found that PMI is
>>> not added to basis and is not amortized over the term of the
>>> loan, but nowhere did I find it either permitted or
>>> prohibited as a deduction as paid. Who is right?

>> Not a deduction for 2006 or earlier.
>>
>> For new loans with a PMI in 2007, and it expires in a year
>> or two, PMI will be allowed as a mortgage deduction.

> It's rental property, Art.

Well, sure it is, now that you (and Linda) point that out:^)

You are all right. pmi is a deduction for rental property.

--
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Bill Brown on January 15, 2007, 2:26 am
Please log in for more thread options
 DORFMONT@aol.com (Linda Dorfmont) wrote:

> My client has a single family rental house which she has
> been renting out for many years. When she first got her
> mortgage she was charged private mortgage insurance because
> her down payment was not 20%. I have been deducting this
> insurance premium on her Sch. E. I recently got into a
> discussion with a mortgage broker friend who says that this
> premium is not deductible. After scouring the IRS sites and
> the publication on rental property I have found that PMI is
> not added to basis and is not amortized over the term of the
> loan, but nowhere did I find it either permitted or
> prohibited as a deduction as paid. Who is right?

You are as far as rental property is concerned.

Never rely on mortgage brokers for useful tax advice.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Seth Breidbart on January 16, 2007, 3:54 am
Please log in for more thread options
>> My client has a single family rental house which she has
>> been renting out for many years. When she first got her
>> mortgage she was charged private mortgage insurance because
>> her down payment was not 20%. I have been deducting this
>> insurance premium on her Sch. E. I recently got into a
>> discussion with a mortgage broker friend who says that this
>> premium is not deductible. After scouring the IRS sites and
>> the publication on rental property I have found that PMI is
>> not added to basis and is not amortized over the term of the
>> loan, but nowhere did I find it either permitted or
>> prohibited as a deduction as paid. Who is right?

> You are as far as rental property is concerned.

However, if the LTV ratio is now lower than 80%, the PMI
should no longer be necessary. That can occur due to
principal paydown, or value increase.

Seth

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Dick Adams on January 16, 2007, 3:53 am
Please log in for more thread options
> My client has a single family rental house which she has
> been renting out for many years. When she first got her
> mortgage she was charged private mortgage insurance because
> her down payment was not 20%. I have been deducting this
> insurance premium on her Sch. E. I recently got into a
> discussion with a mortgage broker friend who says that this
> premium is not deductible.

And you thought a mortgage broker knew something about
taxation.

> After scouring the IRS sites and
> the publication on rental property I have found that PMI is
> not added to basis and is not amortized over the term of the
> loan, but nowhere did I find it either permitted or
> prohibited as a deduction as paid. Who is right?

You are and it wasn't even close. It's a requirement of
the loan for the benefit of the lender. Therefore, it is
deductible.

Dick

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Similar ThreadsPosted
rental income + rental mortgage + rental mortgage interest - dazed /confused April 11, 2006, 3:50 am
Rental Expense? March 27, 2008, 12:01 am
Rental property mortgage interest deduction May 1, 2007, 7:12 pm
Can you call a rental a 1st home for a lower rate on a mortgage? April 16, 2006, 2:48 am
Yest another rental expense question March 28, 2008, 8:52 pm
Tax Mortgage question July 12, 2007, 8:51 pm
Mortgage Advice September 10, 2007, 6:58 pm
Mortgage Credit on Points February 4, 2008, 6:42 pm
Mortgage interest deduction June 15, 2006, 7:07 am
Re: Mortgage interest on second home July 1, 2006, 4:37 pm

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap