I'm in a federal income tax class, anyway I'm trying to figure out somebody's limitations for itemized deductions since they earn above the threshold. I'm just not sure if mortgage interest is an investment interest expense, if it is then it will not be subject to the overall limitation for itemized deductions. Thanks.
2006-09-17 04:20:24 · 2 answers · asked by horrorfan 3 in Education & Reference ➔ Higher Education (University +)
No. If the mortgage interest is on the primary or 2nd home, the interest is deducted on Sch A under the Interest section (usually line 10, but can be line 11). It is subject to the income limitations.
If the mortgage interest is on a residential rental property, it goes on Sch E, line 12 as a deduction against rental income.
If the mortage interest is on a other rental property (farm, commercial, industrial, etc), the deduction goes on the respective form (go to the IRS website and search the forms).
Oh, and if your tax professor is like mine, he will deduct an entire letter grade if you don't go ask him any questions (you always have questions for the tax client).
Good luck!
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