Home #1: bought Dec 2014. Moved out Jul 2017. On market Oct 2017. Sold Jan 2018. Paid real estate taxes and mortgage interest.
Home #2: 2nd home/vacation home. Bought Oct 1016. We still own it. Paid RE taxes and HELOC interest.
Home #3: bought Dec 2017. It is our current primary home. Paid RE taxes (prorated at closing), prepaid interest and VA funding fee (Mortgage Insurance Premium on form 1098).
Ownership of Homes #1 and #3 (both primary) overlapped by about 13 days (end of December 2017). Do we prorate the interest on Home #1 through closing of Home #3?
Do we deduct all the RE taxes on all 3 homes or must we prorate one?
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while the you can normally deduct the mortgage interest on two homes, there is a limitation on deductible interest if the average balance for the period outstanding of the mortgages on the two are over $1 million and HELOC's average over $100,000 for the period outstanding. TT does the calculations on the Mortgage Limitation Smart Worksheet.
The real estate taxes, on all three properties, are deductible.
All three properties qualify for the mortgage interest deduction; so it is your choice which two your use.
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