Mortgage Credit Certificate (MCC)

[mbigelow]

I have a client with an MCC issued in a prior year. Toward the end of 2016, she refinanced and has not received a reissued MCC. The IRS instructions for this credit state, "You can refinance your mortgage without losing this credit if your existing MCC is reissued and the reissued certificate meets all of the following conditions." My client's mortgage broker (an interested party, of course) told her she would eventually get her a reissued MCC but that all was good for 2016, since she only refinanced at the end of the year. I, however, tend to interpret the IRS wording to mean that my client is not eligible to claim the credit in 2016 since she has not received a reissued certificate. Thoughts? Thank you.

[FEDUKE404]

Plan

Get more facts or extend filing of 2016 until certificate (hopefully) appears.

Assumptions can create problems in the tax world. . .

FE

[mbigelow]

Get more facts or extend filing of 2016 until certificate (hopefully) appears.

Assumptions can create problems in the tax world. . .

FE

Thanks, Feduke, an extension is definitely a possibility, but what other facts are you suggesting I gather? I've searched quite a bit and can find no further clarification in IRS sources or otherwise. It appears to me to be a matter of interpreting what is available from the IRS. But perhaps I'm missing something and/or someone else has experience in this matter. My fingers are crossed for more responses!

[FEDUKE404]

Waiting for new MCC

Thanks, Feduke, an extension is definitely a possibility, but what other facts are you suggesting I gather? I've searched quite a bit and can find no further clarification in IRS sources or otherwise. It appears to me to be a matter of interpreting what is available from the IRS. But perhaps I'm missing something and/or someone else has experience in this matter. My fingers are crossed for more responses!

The "missing facts" I was referring to would basically be a **NEW** MCC in hand.

While your client is likely eligible to continue to use the prior MCC, I would tread very lightly until I have a replacement MCC in hand, or at least a source (name/address/telephone) who can tell you with certainty that such does/will exist for tax year 2016.

I assume you are familiar with how to enter the MCC and make the suitable adjustments to "mortgage interest" on Schedule A **AND** on any state income tax return? Since you mentioned a refi exists, you also need to be careful about any points/LOF which MUST be amortized over the life of the new loan.

It's doable, but I prefer to work with facts versus speculation. . .unexpected "surprises" can otherwise occur.

FE

[mbigelow]

The "missing facts" I was referring to would basically be a **NEW** MCC in hand.

While your client is likely eligible to continue to use the prior MCC, I would tread very lightly until I have a replacement MCC in hand, or at least a source (name/address/telephone) who can tell you with certainty that such does/will exist for tax year 2016.

I assume you are familiar with how to enter the MCC and make the suitable adjustments to "mortgage interest" on Schedule A **AND** on any state income tax return? Since you mentioned a refi exists, you also need to be careful about any points/LOF which MUST be amortized over the life of the new loan.

It's doable, but I prefer to work with facts versus speculation. . .unexpected "surprises" can otherwise occur.

FE

Understood, Feduke, thanks a lot for you attention to this matter. Yes, I am familiar with how to enter the MCC and make the appropriate adjustments to the mortgage interest. I appreciate the reminder about the points and all. Hope you're having a great tax season!