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Itemized Deductions/Standard Deductions: Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)
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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? 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. Is interest on a home equity line of credit deductible as a second mortgage? You may deduct home equity debt interest, as an itemized deduction, if you are legally liable to pay the interest, pay the interest in the tax year, secure the debt with your home, and do not exceed certain limitations. 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? 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. The interest would be deducted on Form 1040. Schedule A. The amount you can deduct as interest on home equity debt is subject to certain limitations. Is the mortgage interest and property tax on a second residence deductible? 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. Real estate taxes paid on your primary and second residence are, generally, deductible. Deductible real estate taxes include any state, local, or foreign taxes on real property levied for the general public welfare. Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property.
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