Writing off Mortgage Interest?

Question

I bought my house on 8/23/2005 I was told I cannot write off the interest I paid on my mortgage between 8/23 and 12/31 because i was not in my house for 6 months or more, but I could write it off this year. How do I write off the interest from then. Do i just need to enter an explanation why I am writing it off Like Unclaimed from 2005 or did my accountant lie to me. Thanks... Please no guessing here only qualified people

I bought my house on 8/23/2005 I was told I cannot write off the interest I paid on my mortgage between 8/23 and 12/31 because i was not in my house for 6 months or more, but I could write it off this year. How do I write off the interest from then. Do i just need to enter an explanation why I am writing it off Like Unclaimed from 2005 or did my accountant lie to me. Thanks...
I live in Pennsylvania

Please no guessing here only qualified people

I live in Pennsylvania

Answer 1

You probably could not write off your interest paid in 2005 because it wasn't enough to exceed your standard deduction (therefore, it wouldn't have benefit you). For 2006, you can only claim interest PAID in 2006. You lose the deduction for the 2005 interest.

Answer 2

There is no six month rule, so that wasn't correct. But you only itemize deductions if your itemizing has a higher total than the standard deduction you get automatically, so maybe that's what the accountant was trying to say - that if you'd been there another month, your interest would have pushed your itemized deductions higher than the standard.

Further, he was probably saying that this year, you could write off what you paid in 2006. You can't add what you paid in 2005 to your 2006 return - that deduction is just lost, replaced by the standard deduction for 2005.

This year you will need to itemize, using schedule A. If your itemized deductions this year exceed the standard deduction, then you'll file the schedule A. Since you had the house the whole year, they probably will be enough.

If my assumptions in the first couple paragraphs of my answer aren't correct, then I'd find a new accountant. But that's probably what he or she was really trying to say. Ask the accountant for an explanation.

Answer 3

You will need to prepare an amended return using form 1040X for 2005 if the tax comes out to be less than what you paid originally. The housing interest and real estate taxes that you paid during 2005 have to be deducted on your 2005 return. If the total of the deductions for 2005 don't exceed the standard deduction don't file an amended return.
There is nothing in the tax code requiring any amount of time in the residence before you can deduct the interest.
If they were talking about your state return then they are right that you can't deduct the mortgage interest but that is because PA does not allow any deductions on the return.

If someone ever tells you something about taxes in the future that sounds to stupid to be true ask then for a code section cite. They won't be able to give you one in most cases.

Answer 4

Your accountant misinformed you. You can write off the interest in 2005 in 2005. You can not include that amount on your 2006 return. You must refile an amended return for 2005 and claim the interest expense.
Your accountant may have been telling you that the amount of the deduction in 2005 was smaller than the standard deduction would have been. If he filed a short form with the std deduction (no itemization) that may be the case.
Check with him.

Answer 5

ive never heard of that. if you didnt claim this interest when it was paid (2005) you lost the deduction. you cannot claim interest from 2005 on your 2006 tax return. you can only claim what you actually paid in 2006. the mortgage interest paid will be reported to the IRS as well.

Answer 6

easily, you're not any further splitting the loan price. even regardless of the reality that you have not any employ contract, you're paying her lease. She is legally obligated to pay the loan funds and is entitled to the interest deduction. on the different hand, she is meant to declare the money that you pay her as lease income and pay taxes on that income. the top result's in case you're trying to position in writing off the funds, the IRS likely will locate out that your lady friend isn't paying taxes on her house income and owes the authorities a tidy sum.