Interest on mortgage in excess of 750K can be set off against interest income?

Forum|Forum|1 year ago
July 29, 2024
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Hi,

If the mortgage is say 1 million (excess of 750K), then only the interest on 750K is deductible from taxable income. Say have interest income from high yield savings account and mortgage of 1 million, can the interest earned through savings account be set off against the interest paid for mortgage amount in excess of 750K ?
@Carl ,

rjs

Employee

No, you can't do that. Interest income from a savings account has nothing to do with mortgage interest that you pay. You can't offset one against the other.

u0d4n7a0pAuthor

Thanks @rjs, over life of mortage, lot of interest amount which is not deducted from taxes would accumulate. Can it be added to cost basis of the property?

rjs

Employee

No, you cannot add mortgage interest to the basis of the home.

As you obviously know, the deduction for home mortgage interest is limited. There is no tax break, offset, or other compensation for interest that exceeds the limit. It's just an expense that you have to pay and you don't get any tax break for it.