What is Mortgage interest deduction?
In short
Individuals who itemize can deduct qualified residence interest on up to $750,000 ($375,000 if married filing separately) of acquisition debt on a main home and one second home, a limit the One Big Beautiful Bill Act made permanent.
Key takeaways
- Acquisition debt is debt used to buy, build or substantially improve the home that secures it.
- Home equity interest is deductible only if the money was used to buy, build or substantially improve the home.
- Debt taken on before December 16, 2017 keeps the older $1,000,000 limit.
Where it's tested
REG: Individual Taxation: Adjustments & Deductions — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under current law, as made permanent by OBBBA, interest on home acquisition debt is deductible on up to how much of acquisition indebtedness (for debt incurred after December 15, 2017)?