I have three separate properties with mortgages. TurboTax allowed me to put in the mortgage interest for all three, even though I don't think that's allowed.

[keholl]

Will it filter the ones out later that are over the maximum 2 properties?  And can I also deduct interest on a HELOC that is tied to my primary residence?

[PaulaM · Accepted solution]

No, the program doesn't know that you have 3 properties, just because you entered 3 1098's. Individuals can have multiple 1098's for different loans on the same property. You will need to remove one of the home's mortgage interest.

You can write off 100 percent 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. (That's a total of $1.1 million of debt, not $1.1 million on each home.)

As long as the 1st mortgage, HELOC, and second home mortgage are within the limits above, you can deduct the interest.

http://blog.turbotax.intuit.com/tax-deductions-and-credits-2/home/the-tax-benefits-of-home-equity-li...

https://www.irs.gov/publications/p936/ar02.html

[keholl]

Thanks for the answer.  I would like to submit that TurboTax should have a pop-up or something to alert customers of this limit.  I rely on TurboTax to not let me do something illegal.  Makes me wonder what else it has let me do that I shouldn't have.....

[PaulaM]

Thank you. We appreciate the feedback.