Mortgage interest may be deductible, but the rules depend on the property, loan date, use of the proceeds, and taxpayer’s circumstances.

Home Mortgage Interest Deduction

To claim the home mortgage interest deduction, a taxpayer generally must itemize deductions and have a qualifying secured loan on a main or second home.

According to IRS Publication 936, the general acquisition-debt limits are:

• $750,000, or $375,000 for married taxpayers filing separately, for qualifying debt incurred after December 15, 2017
• $1 million, or $500,000 for married taxpayers filing separately, for qualifying debt incurred before December 16, 2017

Interest on a home equity loan or line of credit is not automatically deductible. The proceeds generally must be used to buy, build, or substantially improve the home securing the debt. The former separate $100,000 home-equity debt deduction no longer applies.

What Does Form 1098 Report?

A mortgage lender or servicer may issue Form 1098 when it receives at least $600 of qualifying mortgage interest from an individual during the year.

The form may report:

• Mortgage interest received
• Outstanding mortgage principal
• Mortgage origination date
• Refunds of overpaid interest
• Reportable points
• The secured property’s address
• Number of properties securing the loan
• Mortgage acquisition date, when applicable

Borrowers should review the form for accuracy but should not assume every amount shown is deductible.

Jointly Owned Property

When multiple people own a property and contribute to the mortgage, the deductible amount depends on factors such as ownership, responsibility for the debt, payments made, filing status, and applicable law. Co-owners should consult a tax professional rather than assume each person can claim the full debt limit.

Interest on Rental Property Loans

Interest associated with rental or investment property is generally treated differently from qualified home mortgage interest. It may be deductible as a rental or business expense when the loan proceeds are properly connected to the investment activity, subject to applicable limitations. See IRS Publication 527 for additional guidance.

CoreVest makes commercial, business-purpose loans for investment properties—not consumer mortgages for personal, family, or household use.

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This article is provided for informational purposes only and does not constitute legal, tax, financial, or lending advice. Tax rules are complex and subject to change. Consult a qualified tax professional regarding your circumstances. All loans are subject to underwriting, credit approval, eligibility requirements, and applicable terms and conditions.

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