Hello George. Here are your articles for Monday, June 15, 2015
Is this email not displaying correctly?
View it in your browser .
George Coffenberg
George Coffenberg
Broker of Record
Office: (732) 224-9200
Preferred Properties Real Estate
105 E River Rd
Rumson, NJ 07760-1611
Friend Me on Facebook Follow Me on Twitter Connect with me on LinkedIn
Coffenberg Commercial Real Estate
Preferred Properties Real Estate

Mortgage Deductions: What You Can Do, What You Can't


What is home acquisition debt? For IRS purposes, it's a mortgage you took out after Oct. 13, 1987, to "buy, build, or substantially improve a qualified home," according to IRS regulations. This debt also must be secured by that home. (There are slightly different rules for older mortgages — see below.) In most cases, you can deduct all the mortgage interest.

It can be a great deal, but there are a number of rules that affect what you can and cannot do. Key among them is the limit: The total amount you can treat as home acquisition debt at any time on your home cannot be more than $1 million ($500,000 if married filing separately).

Know Your Definitions

For purposes of deductions, the IRS has specific definitions of what is meant by a "home." Fortunately, the definitions are wide-ranging. According to regulations, a home can be your main home or a second home — like a vacation home. And it doesn't have to specifically be a house. For example, a condominium, cooperative or mobile home counts. Even a boat can count as a home for these purposes — what the IRS is looking for is any facility with sleeping, cooking and toilet facilities. So don't try to deduct a tent.

So What Exactly Can You Deduct?

There are three categories of mortgage debt:

  1. Mortgages you took out on or before Oct. 13, 1987 (called grandfathered debt).
  2. Mortgages you took out after Oct. 13, 1987, to buy, build or improve your home (called home acquisition debt), but only if throughout 2014 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately).
  3. Mortgages you took out after Oct 13, 1987, other than to buy, build or improve your home (called home equity debt), but only if throughout 2014 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2).

The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home, according to the IRS.

More details are available in Publication 530 and Publication 936.

Your Comments

Saved Articles
Comments and Feedback
Refer A Friend
Your Privacy
Powered by
Copyright © HomeActions, LLC All rights reserved.

This email was sent to: gcoffenberg@ppmoves.com

Mailing address: 105 E River Rd, Rumson, NJ 07760-1611