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Where do I enter my mortgage interest paid?

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Question
Where do I enter my mortgage interest paid?

Answer

Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, refinancing your home, or a home equity loan.

You can deduct home mortgage interest only if you meet all the following conditions.

You must file Form 1040 and itemize deductions on Schedule A (Form 1040).

You must be legally liable for the loan. You cannot deduct payments you make for someone else if you are not legally liable to make them. Both you and the lender must intend that the loan be repaid. In addition, there must be a true debtor-creditor relationship between you and the lender.

The mortgage must be a secured debt on a qualified home.

Fully Deductible Interest 

In most cases, you will be able to deduct all of your home mortgage interest. Whether it is all deductible depends on the date you took out the mortgage, the amount of the mortgage, and your use of its proceeds.

If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category.) If one or more of your mortgages does not fit into any of these categories, use Part II of this publication to figure the amount of interest you can deduct.

The three categories are as follows:

  1. Mortgages you took out on or before October 13, 1987 (called grandfathered debt)
  2. Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2007 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately)
  3. Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2007 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2).

The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home.


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Views: 443 Created on: Jun 15, 2013
Date updated: Nov 10, 2014

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