The purchase of a second home does not need to be entered on your tax return. Most of the expenses involved in purchasing the home are not deductible, but added to the basis of your house, to reduce any gain when you sell it in the future.
You can, however, deduct the mortgage interest, mortgage insurance, and real estate taxes just like you would on your principal residence [as long as the total debt for the two homes is $1 million or less].
To enter interest on the second home loan, please follow these steps:
- Click on Federal Taxes > Deductions & Credits.
- In the Your Home section, click on the Start/Revisit box next to Mortgage Interest, Refinancing, and Insurance.
- If you haven't entered any mortgage information yet, just proceed through the screens, entering the requested information on your first mortgage. When finished, you will be brought to the Mortgage Deduction summary screen.
- If you've already entered information on one loan, you will be brought to the Mortgage deduction summary screen. Click the Add a Lender box on the Mortgage deduction summary screen.
- Proceed through the screens, entering the requested information.
- Your will be brought back to the Mortgage deduction summary again. You can click on the Add a Lender box as many times as you need to enter your loans.
[Edited | 4/14/2020 | 1:09pm PDT]
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