Mortgage assistance

[appelman]

I am finding the discussions on this subject long on questions and short on answers. The IRS's "safe harbor" discussion only adds to my confusion. So here's a specific case for a principal residence:

Form 1098-MA shows 20,416 both in Box 1 and Box 2; nothing in Box 3.

Form 1098 (Mortgage Interest Statement) shows 18,149 in Box 1 and 3000 in Box 4. Property taxes paid: 5453. Ending escrow balance: 1837. Principal balance is 330,616.

I presume nothing is reportable as taxable income. But should any reduction be made to the deduction for mortgage interest or insurance premiums?

[mactoolsix]

Nothing is reportable, however

ONLY the mortgage interest and property taxes that the T/P actually paid is deductible on Schedule A.

Any part that they paid, may not be deduct.

Hope that helps,
Mike

[appelman]

Are you sure about taxes?

From Pub. 936:

"No other effect on taxes. Do not include these mortgage assistance payments in your income. Also, do not use these payments to reduce other deductions, such as real estate taxes."

A similar question arises regarding mortgage insurance premiums.