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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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If I own 2 homes and rent neither out, I live in one, relatives

Resolved Question:

If I own 2 homes and rent neither out, I live in one, relatives in other. I file 1040 with itemized. How do I deducted the property taxes and mortgage interest?
Submitted: 8 years ago.
Category: Tax
Expert:  MequonCPA replied 8 years ago.

DearCustomer-

 

You are always able to deduct the property taxes on both properties.

 

You can also deduct the mortgage interest on your principal residence. You are also allowed to deduct the mortgage interest on a second home.

 

There are limitations on the amount of interest deductible. The total amount of home acquistion debt cannot exceed $1 million. There are other limitations. I have provided a link to IRS Publication 936 that explains the limitations in greater detail.

 

 

http://www.irs.gov/pub/irs-pdf/p936.pdf

 

Customer: replied 8 years ago.
Just so I make sure I understand. All the property taxes can be added togather and deducted each year. The mortgage interest, I have not had time to read the pages you sent me, can be fully deducted for one home(the amounts are not close to 1 million) and must be what for the second? and if it was done wrong on a prior years return how can that be fixed?
Expert:  MequonCPA replied 8 years ago.

DearCustomer-

 

Yes, all property taxes can be deducted.

 

The $1 million applies to the total allowed amount combined for both residences.

 

If the returns were done incorrect in prior years, you can amend returns going back up to 3 years.

MequonCPA and other Tax Specialists are ready to help you

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