PMI Tax Expense / Deduction on Rental Property

5 Replies

Looks like you have found where the IRS has clearly said no. I would double check with the CPA that does your taxes for confirmation. but I doubt they will say yes when the IRS has already put no in writing.

One option is to pay down your loan below the 80% mark or try and refinance into a new loan with no PMI.

@Daniel Hoffmann This is very interesting. Thank you for sharing. Generally, personal interest is not deductible. However, under the code qualified residence interest is deductible. This is the same code section that allows PMI to be treated as qualified residence interest. You are correct this deduction expired at the end of this year. Interesting enough, the answer to this question before stated to deduct on Sch E, Line 9. Line 9 is insurance not interest. I believe you should reach out to your CPA for a complete analysis.

@Daniel Hoffmann @John Underwood


This was an IRS error and was addressed in a recent reputable publication for tax pros: 

Rental Property Mortgage Insurance—IRS Mistake

Online at the IRS frequently asked rental property questions, you will find the following incorrect question and answer:

  • Question: Can you deduct private mortgage insurance (PMI) premiums on rental property? If so, which line item on Schedule E?
  • Answer: No, you can’t claim a deduction for private mortgage insurance premiums.

This is wrong.

The cause for the error comes from IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes), where on page 1 in the “What’s New” section, the IRS states that the deduction for mortgage insurance premiums expired and you can’t claim that deduction for premiums after 2017 unless lawmakers extend the break.

The mistake that the IRS makes in its publication and FAQ is that the expiration of the mortgage insurance deduction applies to your qualified personal residence, not your rental property.

Originally posted by @Natalie Kolodij :

@Daniel Hoffmann @John Underwood


This was an IRS error and was addressed in a recent reputable publication for tax pros: 

Rental Property Mortgage Insurance—IRS Mistake

Online at the IRS frequently asked rental property questions, you will find the following incorrect question and answer:

  • Question: Can you deduct private mortgage insurance (PMI) premiums on rental property? If so, which line item on Schedule E?
  • Answer: No, you can’t claim a deduction for private mortgage insurance premiums.

This is wrong.

The cause for the error comes from IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes), where on page 1 in the “What’s New” section, the IRS states that the deduction for mortgage insurance premiums expired and you can’t claim that deduction for premiums after 2017 unless lawmakers extend the break.

The mistake that the IRS makes in its publication and FAQ is that the expiration of the mortgage insurance deduction applies to your qualified personal residence, not your rental property.

 Natalie is 100% correct on that. It is still deductible.