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First time homebuyer/investor mortgage interest

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Money Talk > Taxes

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First Time Poster

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First time homebuyer/investor mortgage interest  Reply with quote  


I had a question regarding mortgage interest being refunded in your taxes. I understand one of the benefits of being a homeowner/real estate investor is that the interest would be refunded upon tax time. I was told by my tax advisor that this benefit is phased out based on your AGI. Ours is in the 170,000 range as of last years taxes, he stated that because ours was too high the only way we can get any benefits is when we sell (thus, it would be best to stick with him because they accumulate each year and he said he was keeping track of our aggregrate tax benefits). Is this true? I always thought our tax liability would be less since we have a house and two investment properties but it appears as if this is not the case. Is there any IRS guidance I can refer my tax advisor to?
Post Mon Jan 18, 2010 6:54 pm
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mortgage interest being refunded in your taxes

No. Most people can deduct their mortgage interest from their income - but it is never refunded.
Your high income means that you are hit with the Alternate Minimum Tax (AMT) so you probably lose most of the interest deduction on your residence.
You don't have to keep track of it, it is carried forward on your 1040 each year.

But your investment properties aren't affected by you income - rental income is handled on schedule E. You deduct your interest payments, your property tax, your insurance, your maintenance & repairs. And you depreciate the property each year which results in a tax reduction.

Your tax advisor can find 'guidance' at the IRS website, in TurboTax, in any Tax Book, etc. But I'm pretty sure he/she already knows these rules - he/she deals with them several times a day during the tax season.
Post Tue Jan 19, 2010 4:37 am
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Either you are misunderstanding your advisor or he's giving you a load of bull to keep you as a client.

I suggest you get it straightened out and if there's a continued lack of communication or if you doubt he's giving you the straight scoop then find someone else. You need to be able to trust this guy 100%.

Post Tue Jan 19, 2010 5:10 am
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