Mortgage Interest Deduction: If you sold your principal residence during the year and acquired a new principal residence, the mortgage interest deduction may be limited. For mortgages of more than $750,000 obtained after December 14, 2017, the deduction is limited to the portion of the interest allocable to $750,000 ($375,000 in the case of married taxpayers filing separately). For a mortgage on a principal residence acquired before December 15, 2017, the limitation applies to mortgages of $1,000,000 ($500,000 in the case of married taxpayers filing separately) or less.

Deductions for Interest on Home Equity Debt: Interest on home equity debt may be deductible where you used that debt to buy, build, or substantially improve his or her home. For example, interest on a home equity loan used to build an addition is typically deductible, while interest on the same loan used to pay personal expenses, such as credit card debt, is not. Thus, it’s important to document the portion of the debt for which an interest deduction is taken.

Gain or Loss on the Sale of a Home: If you sold your home this year, up to $250,000 ($500,000 for married filing jointly) of the gain on the sale is excludable from income. Generally, a loss on the sale of a home is not deductible.

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