David Woods, EA wrote:
- quote -

I said, "...MAY BE non-acquision debt...." I didn't
go into the further restriction that the total debt
cannot exceed the fair market value of the property,
making the excess non-deductible for any purpose.

(Exactly how that applies to debts used to pay for
new construction that does not increase the FMV of
the home is unclear to me.)

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

That assumes the increase wasn't used to improve the home.

--
David M. Woods, EA
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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jason_claes[at]msn.com (Jason) wrote:

- quote -

Yes

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Jason wrote:

- quote -

Most likely yes. That presumes that a) your current
mortgage interest is fully deductible (not over the limits
for amount of either acquisition or home mortgage debt,
properly secured by the property, etc.) and you refinance
only that debt. If refinance and "take cash out" on a loan
that was previously acquisition indebtedness only, you may
have to look to the limits on home equity debt for a portion
of the debt.

--
Ed Zollars, CPA
Phoenix, Arizona

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"Jason" <jason_claes[at]msn.com> wrote:

- quote -

Yes subject to the same rules.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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jason_claes[at]msn.com (Jason) writes:

- quote -

Probably. See IRS Publication 936.

Phil Marti
Topeka, KS

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- quote -

In most cases, you will be able to deduct all of your home
mortgage interest. Whether it is all deductible depends on
the date you took out the mortgage, the amount of the
mortgage, and your use of its proceeds.

If all of your mortgages fit into one or more of the
following three categories at all times during the year, you
can deduct all of the interest on those mortgages. (If any
one mortgage fits into more than one category, add the debt
that fits in each category to your other debt in the same
category.) If one or more of your mortgages does not fit
into any of these categories, use Part II of this
publication to figure the amount of interest you can deduct.

http://www.irs.gov/publications/p936/ar02.html#d0e175

The three categories are as follows.
Mortgages you took out on or before October 13, 1987 (called
grandfathered debt).

Mortgages you took out after October 13, 1987, to buy,
build, or improve your home (called home acquisition debt),
but only if throughout 2003 these mortgages plus any
grandfathered debt totaled $1 million or less ($500,000 or
less if married filing separately).

Mortgages you took out after October 13, 1987, other than to
buy, build, or improve your home (called home equity debt),
but only if throughout 2003 these mortgages totaled $100,000
or less ($50,000 or less if married filing separately) and
totaled no more than the fair market value of your home
reduced by (1) and (2).

The dollar limits for the second and third categories apply
to the combined mortgages on your main home and second home.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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jason_claes[at]msn.com (Jason) wrote:

- quote -

Yes. You're just replacing one mortgage loan with another.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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Jason wrote:
- quote -

Refinancing without increasing the loan balance
is a non-event for most tax purposes. If you DO
incrase the loan balance, the excess may be
non-acquision debt, which is limited to $100,000,
and is not deductible for AMT purposes.

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I was thinking of refinancing my mortgage. Can I still deduct the
interest if I refinance?

Jason

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