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Tax Law (Questions About Taxes)/Tax deductions on mortgage on investment property



I was wondering how the tax deductions on an investment property works. My dad is helping me out with the down payment, but I will be paying the monthly installments on the mortgage and my name will be on the deed. How would the deductions on the mortgage interest, property tax and depreciation work in this case?

Thank you.


ANSWER: Varun,

Thanks for your question.

If it is an investment property, you can deduct the interest and taxes on Schedule A or you can add them to the basis of the property.  You can't take depreciation on investment property. Other allowable costs can be deducted as miscellaneous itemized deductions or added to the basis.

Hope this helps.

John Stancil, CPA

---------- FOLLOW-UP ----------

QUESTION: Thank you for the quick response.

So in this case, would I be able to take on all the tax ramifications related to the investment property since my dad will be helping out with the mortgage down payment? How would we split that up? What is the deciding factor for how the tax deductions and income would be split up?

Thank you.


You can deduct what you are legally liable for and what you pay with your funds.

You mention income, that would be divided based upon your ownership percentage.  However, if it is an investment property, no income would likely be realized until the property is sold.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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