mortgage interest

[oceanlovin'ea]

Client paid mortgage interest on 3 properties last year. They had their home in Florida and bought a home in Idaho and one in Utah.
Which means taht they paid mortgage interest on 3 properties. I was under the impression that you could only claim on your principal residence and a second home.

They were planning a move to Utah where their children live. They had their house for sale and before it sold they bought a home in Utah, which is now their principal residence.

I guess Idaho is a vacation home. Or possibly they bought it for investment and one of their kids is living in it part of the time.

Am I right in thinking they can only use the mortgage interest on 2 of the properties. How would you decide which two? Does it matter?

Linda

[Lion]

Highest

Pick the two with the highest mortgage interest, of course! And, it doesn't have to be the same two each year; so pick whichever are most beneficial each year, as long as they otherwise meet all the requirements.

[oceanlovin'ea]

Sold house in Florida

They sold the house in Florida in December so it will only be this year that we will have a problem.

The statement is from WAMU and the address it was mailed to is their daughter's address. I wonder if this might be a second mortgage on their Florida home. I'll have to email her and ask.

Last night my brain was extremely tired. Maybe there isn't the problem that I thought I had.

Linda

[oceanlovin'ea]

2nd mortgage

They had a second mortgage on the Florida property. So it is all deductible.

I really need to read the notes people send me.

Thanks

Linda

[Gretel]

If I understand correctly, they bought a third home with a 2nd mortgage on the first home?

This mortgage is considered equity debt and would be deductible only to the extent that total equity debt doesn't go over $100,000.

[Davc]

They had a second mortgage on the Florida property. So it is all deductible.



Linda

Maybe. What's the balance of that loan plus other home equity loans on the Florida property?