grandfathered debt- mortgages incurred b/4 10/14/87
1) all interest on debt secured by a main or second home is fully deductible.
2) pre 10/14/87 debt reduces the limit that applies for additional acquisition debt incurred after 10/13/87
3) I assume there was no refi of this grandfathered debt - if so other rules apply
worksheet to figure deductible interest
1) the total of the average current year balance of all grandfathered debt
2) total of the average of the current year balances home acquisition debt - not grandfathered
3) $1,000,000 ($500,000 if MFS) for indebtedness incurred on or before 12/15/17; $750,000 ($375,000 if MFS) for indebtedness incurred after 12/15/2017
4) the larger of 1) or 3)
5) add the amounts on 1) and 2)
6) enter the smaller of 4 or 5 - this is your qualified loan limit
7) enter the total of the average balance of all mortgages (normally 1) and 2))
however if 6) is less than 7) go to 😎
if 6) is more than 7) STOP all interest of the mortgages on 7) is deductible
😎 enter the total interest paid on qualifying mortgages (those on line 7)
9) divide the on 6) by 7) enter the result to 3 decimal places (should be less than 1.000)
10) multiply 😎 by 9) this is the deductible home mortgage interest
