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You can deduct any mortgage interest you paid prior to the bankruptcy, but you cannot claim any interest that was discharged through a bankruptcy.
Please answer the question. Can mortgage interest paid through a Chapter 13 Bankruptcy case be deducted?
There is a disagreement between the ability to claim the interest or not. Black's law dictionary has long been a leader for lawyers and it says: Any item paid in your plan to a trustee that would normally be a tax deduction, such as back federal or state taxes, spousal support, delinquent mortgage payments or mortgage interest, can still be taken as a personal tax deduction. These are expenses that you are paying through the bankruptcy distribution process by your payment plan administrator, the trustee, and it is the same as if you were writing the check yourself.
If you decide to claim the mortgage interest, the IRS will want you to be able to trace the interest to your payments, if audited. You can't claim interest that was discharged.
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