IRS amends stance on large mortgages
Forbes.com is reporting that the IRS has amended their stance on large mortgage interest deduction. Prior to their amendment homeowner’s who borrowed >$1.0 million to purchase their home were only able to deduct interest on the first $1.0 million. However, if that homeowner borrowed only $1.0 million to acquire their home and then later took out a $100,000 equity loan they were then able to deduct interest on the entire $1.1 million.
What this article is reporting is that the IRS is effectively viewing these two scenarios as being the same. Therefore, the interest on the $1.1 million in acquisition indebtedness is now tax deductible. Homeowners who benefit from this change can amend their taxes back 3 years to take advantage of this change.
Posted: October 19th, 2009 under Taxes.
Tags: acquisition indebtedness, IRS changes rules on home interest deduction, max interest deduction