For tax return, how many home can I be deducting mortgage interest for? Is it just 1st and 2nd home only? or can I also deduct mort. interest for my 3-4th home?
2006-09-23 14:03:38 · 6 answers · asked by ibkid i 1 in Business & Finance ➔ Taxes ➔ United States
Primary residence can be directly deducted. Investment properties (anything other than your primary residence regardless of use) can be deducted when you itemize. Since you will be taxed on the investment property and any income it generates you will offset this with your maintenance costs and interest on the mortgage.
2006-09-23 14:13:55 · answer #1 · answered by sunsetsrbest1 3 · 0⤊ 0⤋
There is a 15 page document you can get from the IRS called Publication 936. Please read it. It is written for the common person, and there is a plethora of good information you will not not find on Yahoo!answers.
In summary, assuming none of the homes are being used for business or rental income, you can only write off the interest you pay for your main (not primary...there is a difference) home and a second home. There is no qualifier for the second home, so it could be any other home you own. There are lots of conditions like total amounts of mortgage, second mortgages, equity lines of credit, etc. Please read the publication. Basically, the mortgage interest for the 3rd and 4th home is lost. There are tricks you can do like refinancing a more expensive home to pay off the cheaper homes, etc., but there are tons of limits that, if you don't read the publication, you'll goof up. If you are too busy to read it, or if you don't understand it, please seek a tax professional.
Hope this helps :)
2006-09-27 00:10:55 · answer #2 · answered by TaxMan 5 · 0⤊ 0⤋
You can only live in one home. Your primary residence interest is generally fully tax deductible. Your second residence may also be tax deductible. That is it. Any other houses you own would have to be rental properties to receive any tax benefits. Opra ownes like 9+ homes and she can only deduct 2 of the mortgage interest on them. Interest is limited to $1,000,000 of value and $100,000 of line of credit and there are other limitations on this.
The IRS has a way to determine if what a home is. If you can sleep in it, cook in it and do a #2 in it, then it is a home. Yes a Boat, camper can be homes. Canoe and pup tent can not be.
2006-09-24 11:21:48 · answer #3 · answered by dillon Y 3 · 1⤊ 0⤋
Your primary residence ONLY.
If you have rental property then the mortgage interest is deducted as an expense of owning the property (not on your schedule A as your primary residence is).
NOTE, you can have more than one mortgage on your primary residence and so long as the funds of those mortgages are used for buying or fixing up your primary residence all those mortgages can be deducted.
2006-09-25 12:45:51 · answer #4 · answered by nova_queen_28 7 · 0⤊ 1⤋
1st and second only. If your 3rd and 4th are rental properties then you fil out a Schedule E on your 1040. If they aren't, then no deductions.
2006-09-23 22:45:55 · answer #5 · answered by KariM 2 · 1⤊ 0⤋
All of the ones you live in can be deducted on Schedule A and all of the ones you rent can be deducted on Schedule E.
2006-09-24 01:52:56 · answer #6 · answered by ? 6 · 0⤊ 1⤋