Editor's Note: Tracy Byrnes will be answering questions throughout the tax season to help guide you through your return. Please send her an email to ask a tax-related question. She will pick a few each week to answer for all of our readers.

Is mortgage interest only deductible from the first two liens on a primary residence? Also, can a state stamp tax paid in a mortgage closing qualify as a state tax that can be written off as an itemized deduction? -- R.N.

As we mentioned in our piece last week , you can deduct the interest on home mortgage loans up to $1 million. So it doesn't matter how many loans you have on your residence. What matters for deductibility purposes is whether the loans were used to purchase or improve your home, says Mark Luscombe, a principal federal tax analyst with CCH, a provider of tax and business-law information.

If the loans were used to purchase or improve your residence, you can deduct interest on up to $1 million.

If the purpose of the loans was to buy a new car or take a trip around the world, it's a different story. Typically, you can deduct interest only on home equity loans up to $100,000.

And as far as your stamp tax goes, it's normally just another name for "transfer tax," which you pay at closing, and is generally not deductible, says Luscombe. Just add it to your cost basis so all is not lost.

My mother had a joint brokerage account in her name and my name. She utilized the account for her own purposes, but put my name on it to ease transfer if she died. Upon her death, the brokerage transferred all of the stock to a new account in my name. When I sell some of the stock, do I use the step-up basis, or her original cost basis? -- M.R.

Presuming the money was included in her estate and was then left to you at her death, you would get the step-up in basis, says Bob Scharin, editor of Warren, Gorham & Lamont/RIA's Practical Tax Strategies, a monthly journal written for tax professionals

I'm also assuming that you were on the account in name only -- you didn't use any of it. In addition, I'm assuming that your mom reported all the income on her return so the assets were truly hers.

This isn't a unique situation. Many people will put their name on a loved one's account for the same reason you did, or for what we Sicilians call a "God forbid" situation. If, let's say, your loved one got sick (God forbid) and was unable to make a transaction, you would be able to do it because your name was on the account. It's like giving you power of attorney.

Can I contribute to my 401(k) at work and still fund -- even if partially -- a traditional IRA account? -- M.G.

Yep. As long as you don't exceed the income limitations, you can contribute to both.

For 2006, the maximum contribution is the lesser of your earned income or $4,000, or $5,000 if you were age 50 or older at year's end.

But whether that IRA contribution is deductible will depend on your adjusted gross income level. Check out IRS Publication 590 Individual Retirement Arrangements for all of the guidelines, but here are the basics.

For a tax-deductible IRA, if you are single and participate in your company's 401(k), your contribution is deductible as long as your AGI doesn't exceed $60,000.

If you're married and you both contribute to a 401(k), your joint AGI can't exceed $85,000 for 2006. If you participate in a 401(k) but your spouse doesn't, your AGI limit is still $85,000.

If your AGI is higher than the limits above, you may still opt to contribute to a nondeductible IRA. There is no AGI cap on a nondeductible IRA, so it doesn't matter how much money you earn. You just won't get a deduction on your tax return for the contribution. But you will be able to let your earnings grow tax-deferred.

There are AGI limits on Roth IRAs as well. So be sure to check out the IRS' publication to decide which IRA is right for you.
Tracy Byrnes is an award-winning writer specializing in tax and accounting issues. As a freelancer, she has written columns for wsj.com and the New York Post and her work has appeared in SmartMoney and on CBS MarketWatch. Prior to freelancing, she spent four years as a senior writer for TheStreet.com. Before that, she was an accountant with Ernst & Young. She has a B.A. in English and economics from Lehigh University and an M.B.A. in accounting from Rutgers University. Byrnes appreciates your feedback; click here to send her an email.