Question:

Is it possible to get 2nd mortgage tax deduction benefits?

Answer:

Yes. Home equity loans and lines of credit, as well as 2nd mortgage loans qualify for tax deduction benefits together with first mortgage loans.

First and 2nd Mortgage Loans Tax Deductibility Rules and Limits

Home equity loans and 2nd mortgage tax deductions are generally available to qualifying first and second homes. Those can be houses, or boats, or a vehicle with appropriate toilet, sleeping and cooking facilities. For second homes, the owner needs to spend at least 14 days a year, or 10% of the rented time for the vacation home to qualify for tax deduction benefits.

However, borrowers with more than one second home can use only one of those for homeownership tax benefits. Refer to IRS Publication 936 for details on qualifying homes.

The loan amount limits for home equity loans and 2nd mortgage interest and points tax deduction depend on what the money is used for. Usually, the interest on the first $100,000 of the home equity or 2nd mortgage loan is deductible in full. For larger amounts, the money should be used for home rehab or another home buying purposes to qualify for larger tax deductions. Again, consult a tax professional, or refer to IRS Publication 936 for full details.

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Common misspellings: mortage and morgage