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Wrench2002
Level 1

Mortgage Deduction

I sold a house in 2019 with a remaining mortgage of $918,000 (which started in 2014 at $950,000) and bought another house with a total mortgage of $1,600,000.  Is my allowable deduction limited to $750,000 or the earlier amount?

If the former, how do I enter the information in TT?

Thanks

3 Replies
Opus 17
Level 15

Mortgage Deduction

Because you have a new loan that was started in 2019, the rules in place in 2019 apply.  ($750,000 deductibility limit.)  You don't get a grandfathered limit.  If you enter your 1098 form, Turbotax should ask the questions needed to calculate the deductible amount of your interest. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Wrench2002
Level 1

Mortgage Deduction

Thank you.

 

So anyone who has an "old" mortgage over $750,000 who buys a new house will forfeit the grandfathered loan? Doesn't seem logical since you still have a loan but then I guess it is tax law.

Opus 17
Level 15

Mortgage Deduction

@Wrench2002 

Because there’s nothing to grandfather. The old loan is paid off and closed, and a new loan is created.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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