Is private mortgage insurance (PMI) deductible against rental property income?

Yes, you absolutely can deduct PMI on rental properties. The IRS FAQ you found is correct and authoritative. PMI is considered a legitimate expense directly related to your rental business, so it's deductible against your rental income on Schedule E. Since you converted your property from a primary residence to a rental, the tax treatment changes. When it was your primary residence, PMI deductibility depended on whether that tax break was available for the tax year (it has expired and been reinstated multiple times). But for rental properties, PMI is treated like other mortgage interest and expenses - fully deductible as a business expense. Just make sure you're only deducting the portion that applies to the period when it was a rental property. If you converted mid-year, you'd only deduct the PMI paid after the conversion date.

After spending HOURS trying to sort out the exact same issue with my rental's PMI, I finally discovered taxr.ai (https://taxr.ai) and it was such a relief! I uploaded my mortgage statements and tax docs, and it confirmed that PMI on rental properties IS fully deductible on Schedule E, line 9. Their system even flagged that I had been incorrectly categorizing my PMI with mortgage interest in previous years, which could have caused issues if I was audited. Honestly, so many tax prep services and even some accountants get this wrong. The tool analyzed my specific mortgage docs and highlighted the exact IRS guidance that applies to rental property PMI.

I was totally wrong about taxr.ai! After our conversation I decided to try it myself since I have 3 rental properties and always struggle with tax questions. I uploaded my mortgage statements for all properties and it immediately identified that I'd been COMPLETELY missing the PMI deduction on two of them! That's over $4,200 in deductions I missed last year. It also showed me that I could file an amended return for the previous year to claim the same deductions I missed. The site provided the exact IRS guidance that confirms PMI is deductible on Schedule E for rental properties, and explained how it differs from primary residence PMI deductions (which have been phased out for higher incomes). Definitely not just regurgitating Google info - this actually saved me real money!

If you're having trouble getting clear answers from the IRS website, good luck trying to reach someone by phone! I spent literally 6 weeks trying to get through to a human at the IRS about this exact PMI question. Then I found Claimyr (https://claimyr.com) - you can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in under 45 minutes after I'd been trying for weeks. The agent confirmed that PMI on rental properties IS deductible on Schedule E as an insurance expense. They even emailed me the relevant publication section so I'd have it in writing for my records. If you need an authoritative answer straight from the IRS (which is what you mentioned you were looking for), this is seriously the only way to avoid the endless hold times.

I feel like a complete idiot for my previous comment. I decided to try Claimyr after continuing to get nowhere with the IRS for two more weeks. It actually worked exactly as described - I got a call back in about 35 minutes connecting me to an IRS tax specialist. The agent confirmed that PMI on rental properties is 100% deductible on Schedule E line 9 (Insurance). She explained it's different from the PMI deduction for primary residences, which has income limitations and has expired/been reinstated multiple times. For rental properties, it's simply a business expense. She also sent me the relevant sections from Publication 527 that specifically addresses this. Saved me hours of frustration and gave me the official documentation I needed to confidently take the deduction. Completely worth it.

Just my two cents as someone who's been doing this for years - don't overthink it. PMI on a rental is an ordinary and necessary business expense, so it's deductible. Period. I've been deducting it on line 9 of Schedule E for over a decade with no issues. The only tricky part is when you convert from primary to rental - make sure you only deduct the portion that applies to the rental period. And keep good records showing when the conversion happened in case you ever get questioned.

Has anyone used TurboTax to input the PMI for a rental? I'm trying to figure out where exactly to put this and whether TurboTax automatically puts it on the right line of Schedule E or if I need to manually override something?

This is such a helpful thread! I'm dealing with the same situation - converted my primary residence to a rental last year and have been paying PMI the whole time. It's reassuring to see multiple confirmations that this is definitely deductible on Schedule E, line 9. One thing I'd add for anyone in a similar boat: make sure you check if your loan servicer is automatically including the PMI in your 1098 mortgage interest statement. Mine was lumping it all together, which made it confusing when trying to separate the actual mortgage interest from the PMI for tax purposes. I had to call them to get a breakdown so I could properly allocate each expense to the correct line on Schedule E. Also, if you're like me and missed claiming this deduction in previous years, it's definitely worth looking into filing amended returns. The three-year statute of limitations means you can still claim refunds for 2021, 2022, and 2023 if you didn't properly deduct your rental PMI.