NEW YORK (MainStreet) -On your Schedule A, you can deduct as mortgage interest only the amount charged on up to $100,000 of home equity debt. If you have total home equity debt of $150,000 and the interest on this debt for the year is $9,000, you can deduct only $6,000 ($100,000 represents two-thirds of total equity of $150,000, so only two-thirds of the $9,000 interest paid is deductible: $6,000).If your home equity borrowings exceed $100,000, you may still be able to claim a deduction for some of the excess interest. You can elect not to treat some of the debt that is secured by your residence as home equity debt, based on what you did with the money you borrowed.
|Rules on deducting mortgage interest are of interest to people with rental property and time shares as well as to those with homes used as a principle residence.|
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