Mortgage on primary home to buy second home, can i deduct taxes?
Renting & Real Estate
Sylvia asked:
my friend’s primary home mortgage is paid off. she want to take a mortgage on the primary home in order to buy a second/vacation home. Can he deduct the taxes?
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my friend’s primary home mortgage is paid off. she want to take a mortgage on the primary home in order to buy a second/vacation home. Can he deduct the taxes?
Caffeinated Content
November 11th, 2008 at 3:33 am
your best answer would be to contact either the IRS directly or a tax preparer in your area. Tax issues are not something you want to get an unauthorized opinion on.
November 14th, 2008 at 8:00 am
yes…..He can deduct the closing costs and the interest on both properties..
November 14th, 2008 at 9:48 pm
I assume you mean the interest, not the taxes.
In any case, the taxes are definitely deductible. The mortgage is deductible up the the amount she originally paid for her primary residence, plus any long term capital improvements she has made.
For example if her first home was purchased in 1992 for $200,000, and she made an addition of a 4th bedroom for $40,000, she can deduct a martgaeg interest payment of $240,000 on a second mortgage, used to pay for a vacation home.
November 16th, 2008 at 5:02 pm
What I suggest is to look to the tax code regarding a second home. But I believe the answer is yes.
November 19th, 2008 at 10:31 am
He can deduct the mortgage because it will be on his primary residence with the vacation home being paid for in cash from the mortgage.