Property tax and mortgage interests for two primary residence

Forum|Forum|4 years ago
February 24, 2022
1 reply
27 views

Hi,

I bought a new house (AKA house A) in June, 2021. After I bought house A, I have home improvement done and moved to house A in August 2021.

I lived house B for more than 20 years. I put house B on market on September, 2021 and was sold in November 2021.

Here are my questions:

House B is my primary residence in last 20+ years.

For 2021 tax return, which is my primary residence?

Should we treat house B as primary residence for January through July 2021 since I moved to house A in Aug?

This mean we treat house A as primary residence starting from August 2021.

2. Property tax and mortgage interests.

I paid property tax and mortgage interest for house B to cover all way to October (house B was sold in November). I also paid two installments for house A.

I paid mortgage interest for house A staring from June 2021.

For 2021 tax return, how do I calculate mortgage interest and property tax for my primary residence?

Assume the following:

House B as primary residence for January through July 2021.

House A as primary residence starting from August 2021.

Here is my formula:

For mortgage interest, first 7 months from house B + remaining 5 months from house A.

For property tax, paid on house B + 2 installments for house A.

Is that right?

Thanks,

Bob

Not A Product Question

Best answer by MinhT1

Yes, you can deduct all property taxes actually paid in 2021. But please note the SALT (state and local taxes) deduction is capped at $10,000 ($5,000 if MFS).

FangxiaL

Level 10

Your primary residence is your home. By this definition, both were your primary residences for 2021. Is the mortgage loan on the old one more than $1m or on the new one more than $750k?

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bl121Author

Level 2

Thanks for quick reply!

Old home mortgage loan was less than 1M. The new home loan was over 750K initially, but I refinanced later in 2021 and now loan amount was under 750K.

How about property tax? I already paid property tax for old home and also 2 installments for new home in 2021. Can I deduct these property tax in 2021 tax return?

Thanks again for your help!

MinhT1Answer

Level 15

Yes, you can deduct all property taxes actually paid in 2021. But please note the SALT (state and local taxes) deduction is capped at $10,000 ($5,000 if MFS).

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