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Level 2

Question

Mortgage Deduction

Forum|Forum|4 years ago
September 11, 2021
1 reply
0 views

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

Level 15

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.

Wrench2002Author

Level 2

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.

Level 15

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