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Frequently Asked Tax Questions

Itemized Deductions/Standard Deductions - Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)


Rev. date: 2/2010


I have a mortgage for my primary residence and a second mortgage for land that I intend to build a home on. Can the interest be deducted for the second mortgage?

previous topic occurrence Interest Expense next topic occurrence
previous topic occurrence Investment Interest Expense Deduction next topic occurrence
previous topic occurrence Itemized Deduction, Home Mortgage Interest next topic occurrence
previous topic occurrence Loan next topic occurrence
previous topic occurrence Mortgage next topic occurrence
previous topic occurrence Primary Residence next topic occurrence

Unless you have begun construction of a home on the bare land that you can occupy within 24 months the interest you paid on the second mortgage would not qualify as deductible mortgage interest.

Rev. date: 2/2010


Is interest on a home equity line of credit deductible as a second mortgage?

previous topic occurrence Deductible Mortgage Interest next topic occurrence
previous topic occurrence Interest Expense next topic occurrence
previous topic occurrence Itemized Deduction, Home Mortgage Interest next topic occurrence
previous topic occurrence Loan next topic occurrence
previous topic occurrence Mortgage next topic occurrence
previous topic occurrence Mortgage Interest Credit next topic occurrence

You may deduct home equity debt interest, as an itemized deduction, if all the following conditions apply:

Rev. date: 1/2010


I took out a home equity loan to pay off personal debts. Is this interest deductible? Where do I enter this amount on my tax return?

previous topic occurrence Home Equity Debt next topic occurrence
previous topic occurrence Interest Expense next topic occurrence
previous topic occurrence Itemized Deduction, Home Mortgage Interest next topic occurrence
previous topic occurrence Loan next topic occurrence

A loan taken out for reasons other than to buy, build, or substantially improve your home, such as to pay off personal debts may qualify as home equity debt.

Rev. date: 1/2010


Our home was seriously damaged by flooding last year. Are there special provisions for claiming a loss since our home is located in a declared disaster area?

previous topic occurrence Deduction, Itemized next topic occurrence
previous topic occurrence Disaster next topic occurrence
previous topic occurrence Theft and Casualty Losses next topic occurrence

Casualty losses not compensated for by insurance or otherwise are generally deductible only in the year the casualty occurred. Consider the following:
For more information on disaster area losses (including flood losses), refer to:

Rev. date: 1/2010


Is the mortgage interest and property tax on a second residence deductible?

previous topic occurrence Deductible Mortgage Interest next topic occurrence
previous topic occurrence Interest Expense next topic occurrence
previous topic occurrence Itemized Deduction, Home Mortgage Interest next topic occurrence
previous topic occurrence Loan next topic occurrence
previous topic occurrence Mortgage next topic occurrence
previous topic occurrence Mortgage Interest next topic occurrence
previous topic occurrence Primary Residence next topic occurrence

The mortgage interest on a second home which you use as a residence for some portion of the taxable year is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence.

Rev. date: 1/2010


If I must deduct points over the life of my mortgage, and I have a 30 year mortgage, does this mean that I divide the points paid by 30 and enter that amount on Schedule A?

previous topic occurrence Closing Costs next topic occurrence
previous topic occurrence Deduction, Itemized next topic occurrence
previous topic occurrence Interest Expense next topic occurrence
previous topic occurrence Itemized Deduction, Home Mortgage Interest next topic occurrence
previous topic occurrence Loan next topic occurrence
previous topic occurrence Loan Origination Fee next topic occurrence

No, you don't divide the points by 30. If you choose to use the straight-line method, you need to divide the points by the number of payments over the term of the loan and deduct points for a year according to the number of payments made in the year.