OK, facts are below. I am trying to determine what interest expense I can claim on my 2022 filing.
1. Bought a house in December 2021 (house B). Refinanced it in January 2022. Did not sell original home (house A) so at 1/1/22, we had two homes.
2. Lived in original home (house A) while we remodeled the new home (house B). Moved into new home (house B) on March 25, 2022.
3. Original house (house A) sat vacant while we prepared it for rental. Was ready for rental and occupied by tenants from 5/1/22 - 12/31/22.
I am confused about what mortgage interest I can deduct - would the IRS consider house B a second residence up until March 24, 2022? And house A a second residence from the period of March 25, 2022 to April 30, 2022? I am trying to maximize my interest deduction within the confines of the tax code. 🙂
In addition, to complicate matters, we have a boat that meets the IRS definition of a second home. Per IRS guidelines, you can only have one second home, so given everything that's going on with houses A and B above, can I only claim interest on the boat as a second home for the period of 5/1/22 - 12/31/22 (i.e., when house A is converted to an investment property)?
