Question

What is home equity debt? Is there an interest and property tax deduction I can take? If so, how many years back can I claim them?

Answer

You can only claim the interest and property tax deduction in the year in which you paid the taxes. You’ll claim these as itemized deductions on Schedule A.

The mortgage interest deduction for home acquisition debt is limited to the interest on $1 million. The limit is $500,000 for married filing separately. Home acquisition debt is a mortgage taken out after Oct. 13, 1987, on a qualified home to:

  • Buy the home
  • Build the home
  • Substantially improve the home

The mortgage interest deduction for home equity debt is limited to the interest on the lesser of these:

  • $100,000 — or $50,000 if married filing separately
  • The total of the home’s fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt

Related Topics

Related Resources

Disaster Tax Relief

Learn more about IRS disaster tax relief and other natural disaster tax tips from the experts at H&R Block.

What You Should Know Before You File Estate Taxes

What are the estate tax rules? Learn more from the tax experts at H&R Block.

Student Loans and your Dependent

If your dependent child uses student loans, do they count as taxable income? Get answers about these and other tax questions with H&R Block.

Non-Custodial Parent Tax Credit

Can both divorced parents claim head of household? Explore how custody affects taxes and find possible solutions. Get tax answers from H&R Block.