Deductions & credits
Your mortgage interest for both of your homes (based on the limited information provided) would be limited as follows: The mortgage limitation percentage would be .857 or 750000/875000. So for example if your total mortgage interest was interest was $52,000 it would be reduced as follows: $52,000 x .857=$44,564. Your deductible interest would be $44,564.
The mortgage interest deduction limits are not applied separately to each loan.
If you use the house as a second home interest on the mortgage is deductible within the same limits as the interest on the mortgage on your first home.
- For tax years prior to 2018, you can write off 100% of the interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties. This is made up of a maximum of up to $1M of mortgage debt plus a maximum of up to $100k of home equity debt. (That's a total of $1.1 million of debt for all homes, not $1.1 million on each home.) The rules that apply if you rent out the place are discussed later.
- Beginning in 2018, the limit is reduced to $750,000 of debt secured by your first and second home for binding contracts or loans originated after December 16, 2017.
- For loans prior to this date, the limit is $1 million ($1.1 million without the $100,000 home equity portion).
This is what the mortgage limitation looks like in TurboTax:
Click here for Publication 936 (2024), Home Mortgage Interest Deduction
Click here for Deducting Mortgage Interest FAQs
Click here for Instructions for Schedule A (2024)
