IRS Reverses Course on Mortgage Interest Deduction

By October 29, 2009 Individuals

The IRS is reversing course on the mortgage interest deduction for high value mortgages.

Some IRS auditors had taken the position that if acquisition debt on a home was more than $1 million, none of the interest on the amount in excess of $1 million could qualify as home equity debt.  The IRS National Office has reversed this interpretation, saying that interest on an additional $100,000 can be deducted as home equity interest.  This effectively allows homeowners to deduct interest on up to $1.1 million of their mortgages.  Every little bit helps!