Can I split mortgage interest between schedule A and schedule E?
I am posted outside the US with the US government and therefore renting out my principal residence. On my 2009 return, if I deduct all the mortgage interest I paid on my house in schedule E (rental property), I won’t have sufficient deductible expenses to itemize in Schedule A. If I can’t itemize schedule A I will not be able to deduct state income taxes I paid to my state of residence (which I continued to pay while living overseas in order to qualify for in-state college tuition for our kids) or my charitable contributions. I’d like to know whether I can allocate some of the mortgage interest I paid to Schedule E and some to Schedule A, such that I can get over the itemizing threshold of Schedule A, and thus be able to deduct the state income taxes and charitable contributions I paid in 2009. The IRS web-site does not address this admittedly rare situation. Thanks very much.
