Delivery: Text Based
Credit Hours: 2
Field of Study: Federal Tax Update
Approval: IRS, CTEC
Many taxpayers and preparers find it difficult to comply with complex home mortgage interest deduction
rules. Noncompliance with the mortgage interest deduction rules includes the many steps necessary to
determine whether mortgage interest and points are deductible.
Issues to consider include: primary residence and more than one other home; multiple refinancings;
sufficient documentation (such as, if refinancing and taking out more than the current acquisition debt
balance and using some of extra funds for improvements and some for personal use); Alternative
Minimum Tax treatment; Form 1098 does not always have the amount that is deductible (example if
total debt exceeds limitations).
This course will help preparers navigate the necessary process to determine the deductibility of home
mortgage interest and points.
After completing this course you will be able to:
Identify payments that are NOT deductible as home mortgage interest
Identify when points paid during the year may be fully deductible
Figure the amount of mortgage interest to report on Schedule A, Form 1040
Determine a qualifying home for purposes of taking the home mortgage interest deduction
Figure the amount of qualifying home acquisition debt
Determine the debt limit on a home equity loan to purchase a second home
Identify the category of a refinanced debt
Identify how qualified mortgage insurance premiums are treated for tax purposes
Identify the rules that apply to the mortgage interest credit