Interest on Taxes

[skiwinnie]

After doing some investigation I am having difficulty determining if the mortgage interest on our taxes for 2004. My wife found out something about having to have lived at that location for at least 14 days the calendar year that your wanting to take it off is that true?

 

[tjkraz]

OK, realize that answering tax questions is a potential minefield...

The rule that your wife found most likely relates to a second home which is also a RENTAL PROPERTY. If you own a second home and also rent it out for use by others, you must occupy it more than 14 days per year or 10% of the time it is rented out, in order for the interest to be tax-deductible.

Your DVC ownership probably qualifies as a second home, and you most likely do not directly rent it out to others. If so, you should be able to deduct interest accrued on your mortgage.

You will, of course, want to verify the above with someone more familiar with your tax status.

 

[Deluzy]

Hi looked into this question myself before we even bought into DVC.

You can deduct mortgage interest from the following:

If you purchased your DVC using a Home Equity line of credi
If you purchased DVC through DVD - thus being a mortgage loan and tax deductable.

Here is the stipulations of a second home as listed on the IRS website:

Second home. A second home is a home that you choose to treat as your second home.

Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.

Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.

Hope this all helps!

~Suzy

 

[cymomtx]

Yes, it is deductible as a 2nd home on your Schedule A. You can deduct your interest and property taxes.

 

[debbiedoo]

so, the 1089 that we received you should be able to deduct the whole amount??

 

[cymomtx]

Yes, you will deduct the full amount reported to you on the 1098.

 

[debbiedoo]

Thanks!! I am sortof new at this. I bought SSR oct 2003, and we were told we would not have a 1098 until this year due to the closing date.