Question

mortgage interest dedcution for a loan in 2023 for over $375,000

Forum|Forum|2 years ago
March 17, 2024
1 reply
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I am single, and I purchased a home in 2023. The loan was for $440,000. I recognize this is over the limit of $375,00. However, turbotax is telling me I can only deduct $53 out of $15,000 in interest paid. I can't understand the IRS publication.

Please help.

Thanks,

Steve

Z

zomboo

On an original home mortgage it is likely the entire mortgage balance is acquisition debt. Meaning included in the cost to purchase the home. The interest limitation in your case is $375,000/(average mortgage balance) = $375,000/$440,000 = 0.85227 = 85.2%. So you can deduct 85.2 % of the interest paid in 2023. I suspect you are spreading the points paid when you bought the loan over the life of the loan and $53 is this year's portion.