John M. Hoffman & Associates CPAs

Frequently Asked Tax Questions

Home Ownership 

"Are there any limits on deducting the mortgage interest?"

Yes there are limits. The government allows you to deduct the interest associated with up to $1,000,000 of acquisition indebtedness on your principal residence and one second home (combined not per). In addition you can deduct interest associated with up to $100,000 of home equity borrowing irrespective of what you use the funds for.

A little known fact is that the home equity interest that is not for home acquisition or improvement is not deductible for alternative minimum tax purposes. We will assume, in preparing your taxes, that all mortgage interest reported on forms 1098 are for fully deductible acquisition indebtedness unless you tell us to the contrary.