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

Tax Depreciation – Section 179 Deduction and MACRS

Learn more about the Section 179 deduction, MACRS and other depreciation deduction rules from the tax experts at H&R Block.

Medical Deduction Limits

Discover the medical deduction limits with advice from the tax experts at H&R Block.

Documents Needed To Deduct Medical Expenses

Find out which documents you need to deduct medical expenses from your taxes with advice from the tax experts at H&R Block.

Claiming and Determining Who Qualifies as a Dependent

Can you claim your daughter's significant other and his child as dependents? Find your tax answers from H&R Block.