The Tax Professionals Blog — home equity
Equitable Ownership and Mortgage Deductions
Posted by Lee Reams Sr. on
You may sometimes encounter a taxpayer who is making mortgage payments on a residence even though he or she is not liable on the loan and therefore is generally unable to deduct the interest. There May Be More Equity Debt than Meets the Eye
Posted by Lee Reams Sr. on
For both regular tax and AMT computations, interest paid on a debt to acquire or substantially improve a first or second home is deductible as long as it does not exceed the debt limit (generally $1 million). This is also true of refinanced debt, except that any increase in debt is treated as equity debt. For regular tax purposes, the interest on up to $100,000 of equity debt on the first two homes can also be deducted.