The Internal Revenue Code (IRC) allows taxpayers to deduct interest paid on loans that are secured by the taxpayers homes and for which they are legally liable, taken to buy their main and second home (including home equity lines of credit, and construction loans). Home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities," To support this deduction, taxpayers should keep Form 1098, "Mortgage Interest Statement" and HUD-1 "Settlement Statement", to use it in your tax return, please click here.
You may not deduct interest on more than $1,000,000 ($500,000 if you are married filing separately) of home acquisition debt Including loan whose purpose is to acquire, to construct, or substantially to improve a qualified home) for your main home and secondary residence. You may not deduct interest on more than $100,000 ($50,000 if you are married filing separately) of home equity debt for your main home and secondary residence. If you own the home jointly with another party, you can only deduct the interest you paid. Where do I report Home Mortgage Interest Tax Deduction? Mortgage interest is an itemized deduction reported on Form 1040, Schedule, Line 10. |
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