Figure A. Is My Home Mortgage Interest Fully Deductible?

Summary: This flowchart is used to determine if the taxpayer's home mortgage interest is fully deductible.

Start

This is the starting of the flowchart.

Decision (1)

Do you meet the conditions (Footnote 1) to deduct home mortgage interest?
Footnote 1: You must itemize deductions on Schedule A (Form 1040) and be legally liable for the loan. The loan must be a secured debt on a qualified home. See Part I, Home Mortgage Interest.

Process (a)

You cannot deduct the interest payments as home mortgage interest.
Footnote 4: See Table 2 for where to deduct other types of interest payments.

Decision (2)

Were your total mortgage balances $100,000 or less (Footnote 2) ($50,000 or less if married filing separately) at all times during the year?
Footnote 2: If all mortgages on your main or second home exceed the home's fair market value, a lower limit may apply. See Home equity debt limit under Home Equity Debt in Part II.

Process (b)

Your home mortgage interest is fully deductible. You do not need to read Part II of this publication.

Decision (3)

Were all of your home mortgages taken out on or before 10-13-87?

Decision (4)

Were all of your home mortgages taken out after 10-13-87 used to buy, build, or improve the main home secured by that main home mortgage or used to buy, build, or improve the second home secured by that second home mortgage, or both?

Decision (5)

Were the mortgage balances $1,000,000 or less ($500,000 or less if married filing separately) at all times during the year?

Decision (6)

Were your home equity debt balances $100,000 or less (Footnote 2) ($50,000 or less if married filing separately) at all times during this year?
Footnote 2: If all mortgages on your main or second home exceed the home's fair market value, a lower limit may apply. See Home equity debt limit under Home Equity Debt in Part II.

Decision (7)

Were your grandfathered debt plus home acquisition debt balances $1,000,000 or less (Footnote 3) ($500,000 or less if married filing separately) at all times during the year?
Footnote 3: Amounts over the $1,000,000 limit ($500,00 if married filing separately) qualify as home equity debt if they are not more than the total home equity debt limit. See Part II of this publication for more information about grandfathered debt, home acquisition debt, and home equity debt.

Process (c)

Go to Part II of this publication to determine the limits on your deductible home mortgage interest.

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This is the ending of the flowchart.

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