Mortgage Interest Limitation

Technical topics regarding tax preparation.
#1
clc0723  
Posts:
40
Joined:
13-Jul-2015 7:29am
Location:
Washington DC
Hi Pros,

Hope all is well!

I get a question about the new $750k mortgage loan limitation for interest deduction.

If I got a mortgage in June 2018 for $1,000k and at the end of 2018 it went down to 900k. For the average loan balance method, should I use (1000+900)/2= 950k or (0+900)/2=450k to calculate the portion of the deductible mortgage interest?

Thanks a lot!
 

#2
Noobie  
Posts:
1134
Joined:
22-Apr-2014 1:35pm
Location:
Jacksonville, FL
3. Mortgages you (or your spouse if married
filing a joint return) took out after December 15, 2017, to buy, build, or substantially
improve your home (called home acquisition debt), but only if throughout 2018
these mortgages plus any grandfathered
debt totaled $750,000 or less ($375,000 or
less if married filing separately)

From Pub 936

So, you can just take 750k * the interest rate/365*#days loan was outstanding in 2018.
 


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