TaxConnections

Ask Tax Question

What is the maximum tax deduction on interest for a home

Actor's Taxes
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
John Stancil
There is no set dollar amount for deducting interest on a home. However, there are limits. In terms of debt on a home, the IRS classifies it into two categories - acquisition debt, and home equity debt. Acquisition debt is debt incurred to purchase a home. You cannot deduct interest on more than $1,000,000 of acquisition debt. Home equity debt is debt incurred after the purchase of the home, such as a home equity line of credit. You can deduct interest on $100,000 of home equity debt. If you refinance existing debt, the portion of the new loan that was used to pay off the prior loan is still acquisition debt. Additionally, if you have no home equity debt, $100,000 of the acquisition debt can be counted as home equity debt, giving you a maximum of $1,100,000 in home debt that you can deduct the interest on. Finally, you are limited to deducting interest on more than two homes in a given year. For example, assume you sell your primary residence at some point in the year and purchase a new primary residence and you have a beach house. That is three residences, and you cannot deduct interest on all three.
Leave a Comment 85 weeks ago



Meet Leading Tax Advisors

User Photo Kathryn Morgan

Bossier City, Louisiana, USA

Enrolled Agent, Master Tax Advisor

User Photo Peter J. Scalise

New York, New York, USA

Federal Tax Credits & Incentives Practice Leader

User Photo John Stancil

Lakeland, Florida, USA

Tax Advisor/CEO

User Photo John Dundon, II EA

Denver, Colorado, USA

Tax Director

User Photo Steven Potts JD EA IAR

Fullerton, California, USA

Principal

User Photo Devon McCarthy FCCA, EA

Sanford, Florida, USA

President

User Photo Caran Ebert, CPA

Topanga, California, USA

Tax Advisor

User Photo Lisa Nason CPA, MST

Greenville, South Carolina, USA

Managing Shareholder

User Photo Gary Carter, PhD, MT, CPA

Edina, Minnesota, USA

President

User Photo NEERAJ BHATIA, CPA

Santa Clara, California, USA

Tax Principal - President

User Photo Bill Robinson, CPA

Chattanooga, Tennessee, USA

Owner

User Photo Hugo Van Zyl

Stellenbosch, South Africa

Exchange Control & Master Tax Practitioner (SA)

User Photo Douglas Stransky

Boston, Massachusetts, USA

Tax Partner, International Tax

User Photo Larry Stolberg, CPA, CA

Toronto Mississauga Oakville Burlington Hamilton, Canada

Tax Specialist

User Photo Dr. Daniel Erasmus

West Palm Beach, Florida, USA

Managing Partner/EMEA

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

Contact Us Today