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Is interest on the second home deductible? If yes, then exactly

Resolved Question:

Is interest on the second home deductible? If yes, then exactly where in Turbo Tax Home and Business. Please only answer if you are familiar with Turbo Tax Home and Business 2012.

If one of the houses is occupied by the husband and the other is occupied by the wife and kids and they are married filing jointly, which home would be considered primary residence?

There were some loan forgiveness in 2012 on the house occupied by the husband that needs to be claimed.

Is it better to file separately in this situation?
Submitted: 10 months ago.
Category: Financial Software
Expert:  Robert M. replied 10 months ago.

Hi, I'm Robert and I'll be helping you with your financial software question.

 

Mortgage interest

If you use the place as a second home-rather than renting it out-interest on the mortgage is deductible within the same limits as the interest on the mortgage on your first home.

You can write off 100 percent of the interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties. (That's a total of $1.1 million of debt, not $1.1 million on each home.) The rules that apply if you rent out the place are discussed later.

 

 

I believe that you could use either as the primary residence. Normally it would be the one that you stayed in for more months but in this case I don't think it would make any difference but I would choose the more valuable house as the primary.

 

I could not tell you whether it is better to file separately you would have to try it both ways and see which saves you more.

 

 

 

 

Robert M., Consultant
Satisfied Customers: 7166
Experience: 30 yrs. of computer experience in financial and marketing departments.
Robert M. and 2 other Financial Software Specialists are ready to help you
Customer: replied 10 months ago.
There was loan forgiveness on one of the houses in 2012 and it would be beneficial to use it as the primary, yes?
Expert:  Robert M. replied 10 months ago.

I am in the financial software department here, I can tell you some basic stuff and deal with the software. For tax advice like that i have to send you to the accounting people

 

 

Customer: replied 10 months ago.
It is a moot point now. I may have to take a different route for such deduction.

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