Second home interest deduction

Forum|Forum|1 year ago
January 8, 2025
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I bought and sold a second home in 2024. My primary home does not have a mortgage. The purchase was 6 months prior to the sale of the other second home. I assume that the interest is only deductible from one of the mortgages during the time both second homes were owned. Do I enter a lesser amount than indicated on the 1098 for one of the homes, ideally the one with the least interest per month?

pk12_2

Employee

@JGH59 , IRC section 163 (h)3(B) and following subsections deal with acquisition indebtedness, interest thereon, qualified residences etc. The use always is aggregate indebtedness , main-residence and ONE other chose by the taxpayer. Thus for the year 2024 interest deduction is on aggregate indebtedness of 750,000 for a joint filer or 375,000 for single or MFS filer.

Therefore you get to choose which 2nd home is part of your qualified residence.

My reading also does not preclude each MFS filer having a separate / different 2nd home.

Perhaps , you should consult a tax professional especially if the interest deduction warrants the cost/effort.

JGH59Author

My question is not a qualification question on whether the second home interest is deductible. Both homes qualify based in use. It is a question on how to get TurboTax to support the entry of the 1098 information without combining the two separate mortgages when they are going to be independent of each other for specific time frames. Turbotax needs to recognize that only one second home is allowed for a designated time frame and allow the allocation of the mortgage interest stated on the 1098.