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?
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
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