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Subject Author Date
Can I deduct deferred mortgage interest? albion01 01-24-2007
Posted by Seth Breidbart on January 29, 2007, 2:10 am
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>>> albion01@gmail.com wrote:

>>>> Since may of 2005 I have had a minimum payment mortgage on
>>>> my house. I have incurred, this year alone, $3700 in
>>>> deferred interest which was added to the principal of my
>>>> loan each month. I was wondering if I can declare that
>>>> deferred interest as a deduction on my 2006 US income taxes.
>>>> I was also wondering if I could also deduct the deferred
>>>> interest from the previous year since I didn't use on my
>>>> previous years tax form.

>>> Deferred interest is not interest you paid. You can only
>>> deduct the interest you paid.

>> If he borrowed money on his credit card and paid with that,
>> he'd get the deduction. How is this different?

> How would he claim the deduction?

He borrowed on his credit card and paid that as mortgage
interest. The mortgage interest is deductible. Interest on
the credit card loan isn't. (I've done that, because the
credit card loan was at 0%, so I let my money earn
interest.)

Seth

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Posted by A.G. Kalman on January 26, 2007, 11:52 pm
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 Stuart A. Bronstein wrote:
>> albion01@gmail.com wrote:

>>> Since may of 2005 I have had a minimum payment mortgage on
>>> my house. I have incurred, this year alone, $3700 in
>>> deferred interest which was added to the principal of my
>>> loan each month. I was wondering if I can declare that
>>> deferred interest as a deduction on my 2006 US income taxes.
>>> I was also wondering if I could also deduct the deferred
>>> interest from the previous year since I didn't use on my
>>> previous years tax form.

>> Deferred interest is not interest you paid. You can only
>> deduct the interest you paid.

> If he borrowed money on his credit card and paid with that,
> he'd get the deduction. How is this different?

It's a minimum payment mortgage. Each monthly payment is
less than the actual interest owed. The unpaid interest is
added to principal. A cash basis taxpayer can not deduct
interest unless the taxpayer actually pays the interest. In
this case, the debt is growing each month.

--
Alan
http://taxtopics.net

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Seth Breidbart on January 26, 2007, 11:52 pm
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>> albion01@gmail.com wrote:

>>> Since may of 2005 I have had a minimum payment mortgage on
>>> my house. I have incurred, this year alone, $3700 in
>>> deferred interest which was added to the principal of my
>>> loan each month. I was wondering if I can declare that
>>> deferred interest as a deduction on my 2006 US income taxes.
>>> I was also wondering if I could also deduct the deferred
>>> interest from the previous year since I didn't use on my
>>> previous years tax form.

>> Deferred interest is not interest you paid. You can only
>> deduct the interest you paid.

> If he borrowed money on his credit card and paid with that,
> he'd get the deduction. How is this different?

The credit card would have to be through a different bank.

Interest paid on the credit card loan wouldn't be
deductible.

Seth

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Harlan Lunsford on January 25, 2007, 2:05 am
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albion01@gmail.com wrote:

> Since may of 2005 I have had a minimum payment mortgage on
> my house. I have incurred, this year alone, $3700 in
> deferred interest which was added to the principal of my
> loan each month. I was wondering if I can declare that
> deferred interest as a deduction on my 2006 US income taxes.
> I was also wondering if I could also deduct the deferred
> interest from the previous year since I didn't use on my
> previous years tax form.

Did "they", meaning mortgagee, send you a form 1098 for 2005?
Probably not. Will you get one this year? Probably not.

So call them and ask why not.

ChEAr$,
Harlan Lunsford, EA n LA

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Bill Brown on January 26, 2007, 11:52 pm
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> If he borrowed money on his credit card and paid with that,
> he'd get the deduction. How is this different?

It is different in that he did not borrow money on his
credit card. Analogies almost never work when resolving tax
issues.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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