You probably need to wait for the worksheet. You should have 2 1098 forms on your return because you are reporting interest on 2 different homes, one you sold and one you purchased in 2021. If the total debt for both properties exceeds $750k, you have to use the worksheet in order to determine the correct amount of deductible mortgage interest, as it may be limited. The worksheet prorates the total interest to the allowed debt.
In addition to itemizing, these conditions must be met for mortgage interest to be deductible:
- The loan is secured, which means the lender has some kind of guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
- The home with the secured loan must have sleeping, cooking, and toilet facilities.
- The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) to get the full deduction.
- You or someone on your tax return must have signed or co-signed the loan.
- If you rented out the home, you must have used the home more than 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.
@TroyC
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