Publication 936 - Home Mortgage Interest Deduction - Department Of Treasury

The monthly balances total $2,157,000

and the outstanding home acquisition and

2. Multiply the amount in item (1) by the deci-

[($180,000 × 10) + $179,000 + $178,000].

grandfathered debt for each home on the

mal amount on line 11. Enter the result on

Therefore, the average balance of the home

date that the last debt was secured by the

Schedule A (Form 1040), line 10 or 12,

acquisition debt for 2009 is $179,750

home.

whichever applies. This amount is fully de-

($2,157,000 ÷ 12).

ductible.

See

Home equity debt limit

under Home Eq-

uity Debt, earlier, for more information about fair

3. Subtract the result in item (2) from the

market value.

amount in item (1). This amount is not de-

Line 1

ductible as home mortgage interest. How-

Figure the average balance for the current year

ever, if you used any of the loan proceeds

Line 9

of each mortgage you had on all qualified homes

for business or investment activities, see

on October 13, 1987 (grandfathered debt). Add

the instructions for line 13, later.

Figure the average balance for the current year

the results together and enter the total on line 1.

of each outstanding home mortgage. Add the

Include the average balance for the current year

Claiming your deductible mortgage insur-

average balances together and enter the total

for any grandfathered debt part of a mixed-use

ance premiums. If your adjusted gross in-

on line 9. See

Average Mortgage Balance,

ear-

mortgage.

come on Form 1040, line 38, is more than

lier.

$109,000 ($54,500 if married filing separately),

Note. When figuring the average balance of

you cannot deduct your mortgage insurance

a mixed-use mortgage, for line 9 determine the

Line 2

premiums. Otherwise, figure your deductible

average balance of the entire mortgage.

mortgage insurance premiums for the current

Figure the average balance for the current year

year using the rules explained under Mortgage

of each mortgage you took out on all qualified

Line 10

Insurance Premiums in Part I. If the amount on

homes after October 13, 1987, to buy, build, or

Form 1040, line 38, is $100,000 or less ($50,000

substantially improve the home (home acquisi-

If you make payments to a financial institution, or

or less if married filing separately), enter the full

tion debt). Add the results together and enter the

to a person whose business is making loans,

total on line 2. Include the average balance for

amount of your qualified mortgage insurance

you should get Form 1098 or a similar statement

premiums on Schedule A (Form 1040), line 13. If

the current year for any home acquisition debt

from the lender. This form will show the amount

part of a mixed-use mortgage.

the amount on Form 1040, line 38, is more than

of interest to enter on line 10. Also include on

$100,000 ($50,000 if married filing separately),

this line any other interest payments made on

your deduction is limited. Enter your qualified

Line 7

debts secured by a qualified home for which you

mortgage insurance premiums on line 1 of the

did not receive a Form 1098. Do not include

Qualified Mortgage Insurance Premiums De-

The amount on line 7 cannot be more than the

points or mortgage insurance premiums on this

duction Worksheet in the instructions for Sched-

smaller of:

line.

ule A (Form 1040) to figure the amount to enter

on Schedule A (Form 1040), line 13.

1. $100,000 ($50,000 if married filing sepa-

Claiming your deductible points. Figure

rately), or

your deductible points as follows.

2. The total of each home’s fair market value

Line 13

1. Figure your deductible points for the cur-

(FMV) reduced (but not below zero) by the

amount of its home acquisition debt and

rent year using the rules explained under

You cannot deduct the amount of interest on

grandfathered debt. Determine the FMV

Points in Part I.

line 13 as home mortgage interest. If you did not

Table 2. Where To Deduct Your Interest Expense

IF you have ...

THEN deduct it on ...

AND for more information go to ...

deductible student loan interest

Form 1040, line 33, or Form 1040A,

Publication 970, Tax Benefits for

line 18

Education.

deductible home mortgage interest

Schedule A (Form 1040), line 10

this publication (936).

and points reported on Form 1098

deductible home mortgage interest

Schedule A (Form 1040), line 11

this publication (936).

not reported on Form 1098

deductible points not reported on

Schedule A (Form 1040), line 12

this publication (936).

Form 1098

deductible mortgage insurance

Schedule A (Form 1040), line 13

this publication (936).

premiums

deductible investment interest (other

Schedule A (Form 1040), line 14

Publication 550, Investment Income

than incurred to produce rents or

and Expenses.

royalties)

deductible business interest

Schedule C or C-EZ (Form 1040)

Publication 535, Business Expenses.

(non-farm)

deductible farm business interest

Schedule F (Form 1040)

Publications 225, Farmer’s Tax Guide,

and 535.

deductible interest incurred to

Schedule E (Form 1040)

Publications 527, Residential Rental

produce rents or royalties

Property, and 535.

personal interest

not deductible.

Publication 936 (2008)

Page 12

Publication 936 - Home Mortgage Interest Deduction - Department Of Treasury - 2008 Page 12

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