topic I received a mortgage interest rebate on Jan1, 2018 for interest paid in 2017. How do I handle this, as other income in 2018 or by reducing my interest deduction in 2017? in Deductions & credits

I received a mortgage interest rebate on Jan1, 2018 for interest paid in 2017. How do I handle this, as other income in 2018 or by reducing my interest deduction in 2017?

rathsack0104 — Fri, 07 Jun 2019 22:17:13 GMT

Did you itemized your 2017 deductions reporting the mortg...

DoninGA — Fri, 07 Jun 2019 22:17:14 GMT

Did you itemized your 2017 deductions reporting the mortgage interest paid on Schedule A? If so, were your total itemized deductions greater than the standard deduction for your filing status in 2017? If the standard deduction was used on the 2017 tax return then you do not report the rebate on the 2018 tax return or amend the 2017 return.

I itemized in 2017 that included the full amount of inter...

rathsack0104 — Fri, 07 Jun 2019 22:17:15 GMT

I itemized in 2017 that included the full amount of interest even the amount that was rebated in 2018.

See the answer below for reporting the rebate on your 201...

DoninGA — Fri, 07 Jun 2019 22:17:16 GMT

See the answer below for reporting the rebate on your 2018 tax return...

Since you received the money in 2018, you deal with it on...

Opus 17 — Fri, 07 Jun 2019 22:17:18 GMT

Since you received the money in 2018, you deal with it on your 2018 return, you don't adjust the 2017 return.

It is taxable in 2018 if you got a tax benefit in 2017. This may require analysis. For example, if you claimed the standard deduction in 2017, then you got no tax benefit from the interest you paid, and the rebate is not taxable now. Suppose you itemized your deductions and had $25,000 of deductions including the interest and the rebate was $100. You would have deducted $24,900, so the entire amount is taxable.

But suppose your total deductions including interest were $12,900, and the rebate was $300. Because the standard deduction in 2017 was $12,700, you only got a $200 tax benefit from the interest, so only $200 is taxable even though the rebate was more.

After determining the taxable amount of the rebate, enter it on your 2018 return under "other uncommon income", look for "taxable recovery" or "reimbursement of a previous deduction."