Homeowner that may have more than one property?

Question

Can I use the 1099s for selling a property less than a year, and if I own another property? Could I use the 1099s to deduct the sale of one property past mortgage interest, and the mortgage interest of the other home I will reside in? Can one use 1099s to sell only one property per year?

If I sell a home over two years, can I avoid some taxes, and if I own another home?

If I own two homes, and rent one out, would I be eligible for tax deductions on both homes mortgage interest?

Answer 1

Not too sure I understand your question, but let me take a swag.

You can deduct the mortgage interest (with the usual limitations) on any two homes you own (but don't rent out) on Schedule A. If you acquire a third home, you can start deducting that home's interest as long as you stop deducting one of the first two home's interest at the same time. This can happen at any time during the year. So basically, during any one specific month, you can choose which two homes you want to deduct. This can get complicated since your 1098s (not 1099s) simply state the total interest you paid all year, not per month.

When you sell a home you owned AND LIVED IN for any 24 months in the 60 months prior to the sale (they don't need to be consecutive), you do not have to pay capital gains taxes on the first $250,000 of gain or $500,000 of gain if you are married filing jointly and your spouse meets the same "owned" and "lived" requirements. If you lived in the house for less than two years, you have to pay taxes on all gains unless you qualify for one of the hardship conditions in which case the exclusion amount is prorationed.

If you rent a home, all expenses including mortgage interest, real estate taxes, and utilities you pay are all used to offset the rental income you bring in and are all placed on a Schedule E, not Schedule A. You can own hundreds of homes you rent out and still deduct the mortgage interest because it all goes on Schedule E.

Hope this helps :)