Question:

Are mortgage points tax deductible with the Alternative Minimum Tax (AMT)?

Answer:

Yes, in general mortgage points are tax deductible under the Alternative Minimum Tax (AMT). For primary homes, the same rules apply. However, mortgage points and interest tax deduction rules are different on second mortgages and home equity loans.

Under the standard tax code, mortgage points and interest are tax deductible on home equity loans and second mortgages for the first $100,000 of the loan amount and the loan can be used for any purposes. Under the AMT, second mortgage loans have any tax deductibility only if they are used to get or build a house, or for home improvements.

The $1,000,000 home acquisition loan tax deduction limit for couples or married people, filing jointly, applies for both tax codes. Under AMT any home equity debt exceeding house acquisition mortgage has no mortgage points or interest tax deduction benefits.

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