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How to Report the Mortgage Interest Paid on a Timeshare Property

how to claim interest paid on mortgage

A timeshare can count as a second home for the mortgage interest deduction.

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The mortgage interest deduction applies not only to your primary home, but also to a second home. If you took out a mortgage to buy a timeshare, you can deduct the interest as long as the timeshare meets the second home requirements: the mortgage loan must be secured by the property -- in other words, your timeshare weeks are the collateral for the loan -- and the timeshare must have eating, sleeping and bathroom facilities. In addition, if you rent out the timeshare, you must use it for at least 10 percent of the time you have access to it or 14 days, whichever is longer. For timeshares, it's not considered "renting" if you trade weeks or locations, nor do you have to worry about how the timeshare is used by the other owners. If you meet these requirements, you can deduct the interest.

Step 1

Check box 1 of the Form 1098 you receive for your timeshare mortgage to find the amount of mortgage interest paid during the year. Your lender will send you a Form 1098 at the end of every year.

Step 2

Add the amount of mortgage interest paid on your timeshare mortgage to the mortgage interest paid on your primary residence, if any, to calculate your total deduction. For example, if you pay $7,000 of interest on your timeshare mortgage and $20,000 of mortgage interest on your primary home, your total deduction equals $27,000.

Report the total mortgage interest deduction, including the interest for your timeshare mortgage, on line 10 of your Schedule A. Schedule A lists all of your itemized deductions, with the total being reported on line 29.

Report the sum of your itemized deductions, including your timeshare mortgage interest, on line 40 of Form 1040. Your itemized deductions replace your standard deduction, so you should only claim them if they exceed the value of your standard deduction.

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