Page 347 - Individual Forms & Instructions Guide

10:55 - 3-Jan-2023
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
deduct personal interest. However, you what interest you can include on lines 8a taken out after December 15, 2017, you
can deduct qualified home mortgage in- and 8b. can only deduct home mortgage interest
terest (on your Schedule A) and interest If you used any home mortgage on up to $750,000 ($375,000 if you are
on certain student loans (on Schedule 1 TIP proceeds for a business or in- married filing separately) of that debt. If
(Form 1040), line 21), as explained in vestment purpose, interest you you also have qualifying debt subject to
Pub. 936 and Pub. 970. the $1,000,000 limitation discussed un-
paid that is allocable to those proceeds
If you use the proceeds of a loan for may still be deductible as a business or der Limit on loans taken out on or be-
more than one purpose (for example, investment expense elsewhere on your fore December 15, 2017, earlier, the
personal and business), you must allo- return. $750,000 limit for debt taken out after
cate the interest on the loan to each use. December 15, 2017, is reduced by the
Limits on home mortgage interest. amount of your qualifying debt subject
You allocate interest on a loan in the Your deduction for home mortgage in- to the $1,000,000 limit. An exception
same way as the loan is allocated. You terest is subject to a number of limits. If exists for certain loans taken out after
do this by tracing disbursements of the one or more of the following limits ap- December 15, 2017, but before April 1,
debt proceeds to specific uses. For more plies, see Pub. 936 to figure your deduc- 2018. If the exception applies, your loan
information on allocating interest, see tion. may be treated in the same manner as a
Pub. 535. loan taken out on or before December
Limit for loan proceeds not used to
In general, if you paid interest in buy, build, or substantially improve 15, 2017; see Pub. 936 for more infor-
2022 that applies to any period after your home. You can only deduct home mation about this exception.
2022, you can deduct only amounts that mortgage interest to the extent that the See Pub. 936 to figure your deduction
apply for 2022. if you have loans taken out after October
loan proceeds from your home mortgage
Use Schedule A to deduct qualified are used to buy, build, or substantially 13, 1987, that exceed $750,000
home mortgage interest and investment improve the home securing the loan ($375,000 if you are married filing sepa-
interest. ("qualifying debt"). Make sure to check rately).
the box on line 8 if you had one or more Limit when loans exceed the fair
Line 8 home mortgages in 2022 with an out- market value of the home. If the total
standing balance and you didn't use all amount of all mortgages is more than
Home Mortgage Interest of the loan proceeds to buy, build, or the fair market value of the home, see
substantially improve the home. The on- Pub. 936 to figure your deduction.
If you are a homeowner who ly exception to this limit is for loans tak-
TIP received assistance under a en out on or before October 13, 1987; Line 8a
State Housing Finance Agency the loan proceeds for these loans are
Hardest Hit Fund program or an Emer- treated as having been used to buy, Enter on line 8a mortgage interest and
gency Homeowners' Loan program, see build, or substantially improve the points reported to you on Form 1098 un-
Pub. 530 for the amount you can deduct home. See Pub. 936 for more informa- less one or more of the limits on home
on line 8a or 8b. tion about loans taken out on or before mortgage interest apply to you. For
A home mortgage is any loan that is October 13, 1987. more information about these limits, see
Limits on home mortgage interest, earli-
secured by your main home or second See Pub. 936 to figure your deduction er.
home, regardless of how the loan is la- if you must check the box on line 8. Home mortgage interest limited. If
beled. It includes first and second mort-
Limit on loans taken out on or be­
gages, home equity loans, and refi- fore December 15, 2017. For qualify- your home mortgage interest deduction
is limited, see Pub. 936 to figure the
nanced mortgages.
ing debt taken out on or before Decem- amount of mortgage interest and points
A home can be a house, condomini- ber 15, 2017, you can only deduct home reported to you on Form 1098 that are
um, cooperative, mobile home, boat, or mortgage interest on up to $1,000,000 deductible. Only enter on line 8a the de-
similar property. It must provide basic ($500,000 if you are married filing sepa- ductible mortgage interest and points
living accommodations including sleep- rately) of that debt. The only exception that were reported to you on Form 1098.
ing space, toilet, and cooking facilities. is for loans taken out on or before Octo- Refund of overpaid interest. If your
Check the box on line 8 if you had ber 13, 1987; see Pub. 936 for more in- Form 1098 shows any refund of over-
one or more home mortgages in 2022 formation about loans taken out on or paid interest, don't reduce your deduc-
with an outstanding balance and you before October 13, 1987. tion by the refund. Instead, see the in-
didn't use all of your home mortgage See Pub. 936 to figure your deduction structions for Schedule 1 (Form 1040),
proceeds from those loans to buy, build, if you have loans taken out on or before line 8z.
or substantially improve your home. In- December 15, 2017, that exceed More than one borrower. If you and
terest paid on home mortgage proceeds $1,000,000 ($500,000 if you are married at least one other person (other than
used for other purposes isn’t deductible filing separately). your spouse if you file a joint return)
on lines 8a or 8b. were liable for and paid interest on a
Limit on loans taken out after De­
See Limits on home mortgage inter- cember 15, 2017. For qualifying debt mortgage that was your home, you can
est, later, for more information about only deduct your share of the interest.

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