guidance on "other deductible purposes" for mortgage interest deduction

Forum|Forum|2 years ago
February 22, 2024
1 reply
16 views

Publication 936 says you can deduct mortgage interest on a home other than main/second home if loan proceeds used for business, investment, or "other deductible purposes". But there's no further discussion on that last condition. Does anyone have know how/where that phrase is defined?

My example may distract from my question... Parents refinance house to pay off kid's student loans - kid now pays mortgage on parent's house - can kid deduct mortgage interest as student loan interest or mortgage interest or neither?

ProSeries Professional

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Best answer by Just-Lisa-Now-

What other situations would interest be a deduction?

The one I see from time to time, is if you can trace the money back to being used for a rental property purchase/improvements, it could be deductible as interest on the rental property even if the loan is secured by the principal residence

sjrcpa

Level 15

Neither. It's not a qualified student loan.

Kid neither owns the house nor he is liable on the mortgage so no mortgage interest deduction.

The more I know the more I don’t know.

D

DENNYCARRAuthor

Level 4

Thanks, I figured as much as far as the student loan refinance. But you've perfectly demonstrated why I hesitated to mention my example - what about my initial question on the guidance on "other deductible purposes"?

Just-Lisa-Now-

Answer

Intuit Community Champion

What other situations would interest be a deduction?

The one I see from time to time, is if you can trace the money back to being used for a rental property purchase/improvements, it could be deductible as interest on the rental property even if the loan is secured by the principal residence

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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