Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
etkeefe1918
New Member

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?

 
1 Best answer

Accepted Solutions
PaulaM
Expert Alumni

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?


It can be deductible if it the mortgage was done with 90 days of the purchase date.

From IRS pub 936 - Mortgage treated as used to buy, build, or improve home.

 - A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. This applies in the following situations.

  1. You buy your home within 90 days before or after the date you take out the mortgage. The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

4 Replies
PaulaM
Expert Alumni

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?


It can be deductible if it the mortgage was done with 90 days of the purchase date.

From IRS pub 936 - Mortgage treated as used to buy, build, or improve home.

 - A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. This applies in the following situations.

  1. You buy your home within 90 days before or after the date you take out the mortgage. The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
etkeefe1918
New Member

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?

Will the 90-day IRS rule remain in effect for tax years 2018-2025 following the passage of the new tax bill?
PaulaM
Expert Alumni

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?

So far, it looks like the 2018 changes to mortgage interest deduction has to do with the lower $750,000 of debt (instead of $1 million). Changes if any, would be updated in the IRS pub 936.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Sammy1
New Member

Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?

Thanks, are there other requirements beyond the 90 day / max being purchase price + improvements? Any requirements on LTV, for instance? I understand banks may have LTV requirements but is there anything mandated by IRS to qualify for delayed financing?

Dynamic AdsDynamic Ads
Privacy Settings
v