Discussion:Cashed out mortgage refi deduction question
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| Revision as of 14:33, 10 April 2008 Panda (Talk | contribs) (New Discussion) ← Previous diff |
Current revision RJM (Talk | contribs) (Nope... 100k hom) |
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| {{ForumNewPost|UserID=Panda|Date=10 April 2008|Text=Have a client with paid off mortgage on home. Recently took out $540,000 mortgage on home and used cash to invest and personal reasons. Am I correct in that no home mortgage interest deduction is available because there was not mortgage before the refi. }} | {{ForumNewPost|UserID=Panda|Date=10 April 2008|Text=Have a client with paid off mortgage on home. Recently took out $540,000 mortgage on home and used cash to invest and personal reasons. Am I correct in that no home mortgage interest deduction is available because there was not mortgage before the refi. }} | ||
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| + | {{ForumReplyPost|UserID=RJM|Date=10 April 2008|Text=Nope... 100k home equity debt interest is deductible, but is also an AMT item. Also, use interest tracing to allocate interest on the investments portion of the mortgage and deduct as investment interest. Any remainder is non-deductible. | ||
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| + | I recall that you need to make a current tax election to NOT treat portions of the mortgage as mortgage indebtedness, but rather as investment-related borrowing. Perhaps someone working on this now has the cite for this election.}} | ||
Current revision
Discussion Forum Index --> Basic Tax Questions --> Cashed out mortgage refi deduction question
Discussion Forum Index --> Tax Questions --> Cashed out mortgage refi deduction question
| 10 April 2008 | |
| Have a client with paid off mortgage on home. Recently took out $540,000 mortgage on home and used cash to invest and personal reasons. Am I correct in that no home mortgage interest deduction is available because there was not mortgage before the refi. | |
| 10 April 2008 | |
| Nope... 100k home equity debt interest is deductible, but is also an AMT item. Also, use interest tracing to allocate interest on the investments portion of the mortgage and deduct as investment interest. Any remainder is non-deductible.
I recall that you need to make a current tax election to NOT treat portions of the mortgage as mortgage indebtedness, but rather as investment-related borrowing. Perhaps someone working on this now has the cite for this election. | |
