In a new ruling, the IRS allows you to treat excess “acquisition debt” as “home equity debt” when claiming mortgage interest deductions. (IRS Revenue Ruling 2010-25)
The skinny: The tax law allows you to deduct interest paid on up to $1 million of acquisition debt used to buy, build or improve a home. Also, you can deduct interest paid on up to $100,000 of home equity debt, regardless of the purpose.
Now the IRS says up to $100,000 of first mortgage debt in excess of the $1 million limit can qualify as home equity debt. In other words, you can treat the first $1 million of a big first mortgage loan as acquisition debt, and you treat the next $100,000 as home equity debt even though there’s only one loan. That way, you can deduct the interest on the entire $1.1 million.
Tip: The ruling contradicts two previous Tax Court decisions.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/13094/good-news-on-high-priced-homes "