my parents did their taxes and they were told their interest paid was not deductible. i dont have all the details yet, but does any one know why this might happen?
2007-02-03 08:47:27 · 7 answers · asked by Hiram D 1 in Business & Finance ➔ Taxes ➔ United States
like everyone mentioned, if the standard deduction is higher, this would be more beneficial.
also, if the mortgage indebtedness is over $1,100,000 the mortgage interest deduction gets reduced.
2007-02-03 15:39:34 · answer #1 · answered by tma 6 · 0⤊ 0⤋
Interest payments and points on a primary home or a second home should be deductible.
Most of the time when someone runs into this problem, the loan in question is usually on a second-home or investment property. If the property is a rental, the interest is not deductible because its a business expense. They also wouldn't qualify to deduct the interest if they take out an equity loan to finance business/investments, or to buy another property. Ask them what they "declared" to their tax preparer and definitely get a second opinion if you can.
2007-02-03 09:01:49 · answer #2 · answered by Easygreasy 2 · 0⤊ 0⤋
All mortgage interest is tax deductible. Consult your tax consultant as to how this affects you. Here is some additional info. Hope this helps.
2016-05-24 00:15:06 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Could be a misunderstanding. If your parents filed jointly, and their combined itemized deductions were less than $10,300, then they would be better off to take the standard deduction rather than use the itemization.
So it *might* be not that they weren't ALLOWED to - but that it was BETTER for them not to, and to use the Standard Deduction instead...
(not knowing your parents' situation - that's merely a guess)
2007-02-03 08:51:38 · answer #4 · answered by Anonymous · 2⤊ 0⤋
Simple -
our family for years had mortgage interest of $8,000
the deductible is over $10,000 this year that is a 'given' on
the 1040 form
SO - would you rather deduct 8 or 10??
ours is not deductible - I take what they give me
******************why not deduct it ALL
Support the Fair Tax
Pay Tax on what you spend -
NOT what you make!
2007-02-03 08:52:46 · answer #5 · answered by tom4bucs 7 · 2⤊ 1⤋
If they claimed the "standard deduction," instead of itemizing, the interest isn't deductible.
2007-02-03 09:13:44 · answer #6 · answered by Dizney 5 · 0⤊ 0⤋
Only if it is for a 3rd or 4th home-IRS allows your primary residence and 2nd home mortgage interest to be deducted as well as mortgage interest on an equity loan-Hopefully they went to H & R block or somewhere they are entitled to a "do over" for free-Turbo Tax is super easy as well and lots cheaper
2007-02-03 08:52:02 · answer #7 · answered by bikinibabewannabe 3 · 1⤊ 2⤋