Question:

How to determine tax deductibility of mortgage interest on a second home?

Answer:

Regarding tax deductibility of mortgage interest on second homes, the same rules apply as for primary residences. To be able to deduct mortgage interest on a second home there are certain requirements:

  • You have to be liable for the mortgage payments;
  • Your second home needs to qualify as a home;
  • There are certain occupant requirements to satisfy - you have to spend at least 2 weeks, or 10% of the rental time in your second residence;
  • Property taxes on second homes are also tax-deductible;
  • If you own more than one second home, only one of your second homes is eligible for mortgage interest tax deductions.

For more information on mortgage interest tax deductibility, you may use the following publications provided by the IRS.

  • Publication 936, Home Mortgage Interest Deduction;
  • Publication 17, Your Federal Income Tax for Individuals;
  • Tax Topic 504, Home Mortgage Points;
  • Publication 530, Tax Information for First-Time Home Owners;
  • Form 1040, Schedule A (PDF), Itemized Deductions.
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