Is this mortgage for your home? or second home?
You can deduct all the property taxes(ad valorem) paid by the mortgage company in 2005. It is considered as if you took a loan and paid the taxes. Since taxes are deductible in the year paid- you can deduct the tax amount in 2005.
Mortgage interest that could not be deducted due to income limitation will not be carried forward. It is lost.
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
NOL can be carried forward 20 years. You cannot elect one year and than bypass a year. It is carried forward to consecutive 20 years.
It can offset salary and future business income.
Unfortunately that is not possible.