A.      Taxpayer incurred acquisition debt of $800,000 June 30, 2015 on Loan #1 in the form of an interest only 3% first mortgage on taxpayer's primary residence, and

B.     A HELOC (2^nd mortgage ) on June 30, 2015 on Loan #2 in the  debt amount of $125,000 interest only the proceeds of which were used for home improvements. 

C.     In 2020 taxpayer refinanced both loans from 2015 (the acquisition debt) into a new loan  on March 31, 2020 (the refinanced acquisition debt) in the amount of $935,000  at 2.75% (the Refinanced Loan) for Loan #3. Taxpayer received cash out of the refinancing in Loan #3 in the amount of $5,000 and $5,000 was expended in closing costs on the new refinancing in 2020.

In 2020 Taxpayer:  Incurred interest in the amount of $6,000 from Loan #1; incurred interest of $1,500 from Loan #2 and incurred interest in the amount of $20,000 from Loan #3, the "Refinanced Loan." All interest was reported to Taxpayer on form 1098.

 

How much is taxpayer's qualified loan limit in 2015 and how much is taxpayer qualified loan limit in 2020? How much is taxpayer's deductible home mortgage interest for loans reported on form 1098 for 2020  which is to be entered on Schedule A line 8a?

Answer rating: 100% (QA)

The qualified loan limit for a taxpayer in 2015 is 1000000 This is t... View the full answer