If we owned 3 homes in 2017 at the same time, how do we figure which two homes' mortgage interest to deduct? Do we deduct real estate taxes on all three?

oneof15 · ‎June 1, 2019

Home #1: bought Dec 2014. Moved out Jul 2017. On market Oct 2017. Sold Jan 2018. Paid real estate taxes and mortgage interest.

Home #2: 2nd home/vacation home. Bought Oct 1016. We still own it. Paid RE taxes and HELOC interest.

Home #3: bought Dec 2017. It is our current primary home. Paid RE taxes (prorated at closing), prepaid interest and VA funding fee (Mortgage Insurance Premium on form 1098).

Ownership of Homes #1 and #3 (both primary) overlapped by about 13 days (end of December 2017). Do we prorate the interest on Home #1 through closing of Home #3?

Do we deduct all the RE taxes on all 3 homes or must we prorate one?

Anonymous · ‎June 1, 2019

while the you can normally deduct the mortgage interest on two homes, there is a limitation on deductible interest if the average balance for the period outstanding of the mortgages on the two are over $1 million and HELOC's average over $100,000 for the period outstanding. TT does the calculations on the Mortgage Limitation Smart Worksheet.

Hal_Al · ‎June 1, 2019

The real estate taxes, on all three properties, are deductible.

All three properties qualify for the mortgage interest deduction; so it is your choice which two your use.

oneof15 · ‎June 1, 2019

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oneof15 · ‎June 1, 2019

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oneof15 · ‎June 1, 2019

Thank you. Can we choose to deduct mortgage interest on the two main homes during the time they were our main homes in 2017?

For example:

Home #3 (current main home) purchased Dec 19; 13 days of interest.

Home #1 sold in Jan 2018 but was main home at start of 2017 through Dec 18; 352 days of interest.

Anonymous · ‎June 1, 2019

I would choose the two homes that give you the largest interest deduction.

TaxGuyBill · ‎June 1, 2019

Except for the 13 days of overlap, you can deduct all of the mortgage interest (assuming total mortgages are less than $1.1 million). You can deduct the mortgage interest from (1) your Principal Residence, and (2) one other Residence.

oneof15 · ‎June 1, 2019

Thank you! From what I've read, I don't see why someone could not deduct interest on many Principal Residences in one year - just not the same day(s).

If we owned 3 homes in 2017 at the same time, how do we figure which two homes' mortgage interest to deduct? Do we deduct real estate taxes on all three?

Deductions & credits

Deductions & credits

Deductions & credits

Deductions & credits

Deductions & credits

Deductions & credits

Deductions & credits

Deductions & credits