Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Where can I find specific information on the AMT with regard to the mortgage interest trigger? That is, if all of the mortgage (or equity loan interest) wasn't used to buy or improve our home. I'm gathering information BEFORE we decide this is the route we want to go.

I intend to model this for 2007 with TaxACT, but I won't be able to do so until later this week. We have high deductions.

Thanks!
Cookc2
Print the post Back To Top
No. of Recommendations: 1
For AMT purposes, the interest on your home acquisition debt (up to $1 million) is deductible. That is any money used to buy, build, or substantially improve your home.

And that's it. For regular tax purposes, you can also deduct interest on up to $100k of home equity debt - debt that is NOT used for one of the above items. But you can't deduct that interest for AMT purposes.

--Peter
Print the post Back To Top
No. of Recommendations: 0
ptheland writes (in part):

For AMT purposes, the interest on your home acquisition debt (up to $1 million) is deductible. That is any money used to buy, build, or substantially improve your home.

I reply:

This includes a refinance of the loan originally used to acquire the property, at least where no additional cash was taken out, right? --Bob
Print the post Back To Top
No. of Recommendations: 0
ptheland writes (in part):

For AMT purposes, the interest on your home acquisition debt (up to $1 million) is deductible. That is any money used to buy, build, or substantially improve your home.

I reply:

This includes a refinance of the loan originally used to acquire the property, at least where no additional cash was taken out, right? --Bob


Correct. Any cash out provided by the refinance becomes equity debt. The remaining principal balance from the original loan retains its character as acquisition debt.

Ira
Print the post Back To Top
No. of Recommendations: 0
This includes a refinance of the loan originally used to acquire the property, at least where no additional cash was taken out, right?

Yep. Ira got it for me. Acquisition debt remains acquisition debt after a refinance.

But as a side note, any costs rolled into the loan balance on a refi are not acquisition debt. They are equity debt.

--Peter
Print the post Back To Top