Figure A. Is My Home Mortgage Interest Fully Deductible?

Figure A. Is My Home Mortgage Interest Fully Deductible?

Summary: This flowchart is used to determine if the taxpayer's home mortgage interest is fully deductible.

Start Here

This is the start of the flowchart.

Decision (1)

Do you meet the conditions (Footnote 1) to deduct home mortgage interest?

Footnote 1: You must itemize deductions on Schedule A (Form 1040). The loan must be a secured debt on a qualified home. See Part I, Home Mortgage Interest, earlier.

If no, you can't deduct the interest payments as home mortgage interest (Footnote 2). Footnote 2: See Table 2 in Part II of this publication for where to deduct other types of interest payments. Stop here
If yes, continue to Decision (2)

Decision (2)

Were all of your home mortgages taken out on or before October 13, 1987?

If yes, your home mortgage interest is fully deductible. You don’t need to read part II of this publication. Stop here.
If no, continue to Decision (3)

Decision (3)

Were all of your home mortgages taken out after October 13, 1987, used to buy, build or substantially improve the main home secured by that main home mortgage or used to buy, build or improve the second home secured by that second home mortgage, or both?

If no, go to part II of this publication to determine the limits on your deductible home mortgage interest.
If yes, continue to Decision (4)

Decision (4)

Were your (or your spouse’s if married filing a joint return) mortgage balances $750,000 or less ($375,000 or less if married filing separately) (or $1 million or less ($500,000 if married filing separately) if all the debt was incurred prior to December 16, 2017) at all times during the year (Footnote 3)?

Footnote 3: A taxpayer who enters into a written binding contract before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, is considered to have incurred the home acquisition debt prior to December 16, 2017, and may use the 2017 threshold amounts of $1,000,000 ($500,000 for married filing separate).

If yes, your home mortgage interest is fully deductible. You don’t need to read part II of this publication. Stop here.
If no, continue to Decision (5)

Decision (5)

Were your (or your spouse’s if married filing a joint return) grandfathered debt plus home acquisition debt balances $750,000 or less (Footnote 4) ($375,000 or less if married filing separately) (or $1 million or less ($500,000 if married filing separately) if all the debt was incurred prior to December 16, 2017) at all times during the year (Footnote 3)?

Footnote 4: See Part II of this publication for more information about grandfathered debt and home acquisition debt.

Footnote 3: A taxpayer who enters into a written binding contract before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, is considered to have incurred the home acquisition debt prior to December 16, 2017, and may use the 2017 threshold amounts of $1,000,000 ($500,000 for married filing separately).

If yes, your home mortgage interest is fully deductible. You don’t need to read part II of this publication. Stop here.
If no, go to part II of this publication to determine the limits on your deductible home mortgage interest.

This is the end of the flowchart.