Home Mortgage Interest Deduction – Know Your Limits
June 23, 2016 / in LWE in the News
A homeowner can deduct mortgage interest paid on a loan secured by either their principal residence or one secondary residence (qualified home). The definition of a residence includes stock in a cooperative housing corporation owned by a tenant-stockholder, often referred to as a co-op apartment. A boat can also qualify as a residence as long as it has a kitchen and sleeping facilities. If a taxpayer owns more than two residences, only one of the secondary residences can qualify for a home mortgage interest deduction, even if the taxpayer has no mortgage on their principal residence. A deduction cannot be claimed when a loan is taken out on one residence and the borrowed funds are used to purchase or construct a different residence.