How much does IRS care about this?

[Sibley]

I'm so frustrated with this tax software. Situation:

Have to split mortgage interest between schedule A (itemized), schedule E (rental), and home office.
Mortgage interest is split correctly on schedule A and home office.
The software does not allow me to manually input the amount on schedule E so it shows up on the mortgage interest line. Only way to get an amount on that line is to have it flow from schedule A, but if I do that then schedule A is wrong.

Solution:
I can put the amount on the other interest line on schedule E. But, then it's on the wrong line. How much does the IRS care? Amounts will be correct, it's just which line it's on.

Have confirmed the way the software works - spent an hour on the phone with support (HR Block).

[Letj]

And why are you doing this? I have many rental units and have never encountered this problem. The interest expense for the mortgage on my house goes on Schedule A and the interest expense for my rentals go on schedule E; not sure of the need to split mortgage interest.

[Sibley]

It's needed when the rental, home office, and where you live are all the same building with the same mortgage :)

In this case, 50% of property taxes & mortgage interest goes on the schedule E. A small amount (forget the percentage right now, but less than 10%) goes on home office, and the remainder is itemized deductions. Putting it on the home office, while small, saves a bit more in taxes than not doing it.

And of course, due to what the rest of today was like, I'm going to be filing amended returns for both fed and state for my parents because my mom made an estimated tax payment in January for State and forgot to tell me. So, they'll get more money back, but it's aggravating.

[Letj]

Ok I got it. Here's how I would handle it using HR Block Tax Software. I would add a property using the same address and input all the expenses and income thus creating a schedule E. I would then input the the amount related to home mortgage deduction separately under that section which flows to the schedule A and then include the other allocation under home office deductions; all manually calculated and allocated manually.

[Sibley]

Other option: Efile with it on the wrong line. 2 hours later find out that mom didn't tell you about a loan (with deductible interest) and 4th qtr estimated tax pmt. So now you have to do amended returns, which have to be paper filed anyway.

:( This weekend was rough.

But Letj, I like your idea.