- 6 - a casualty loss, and an additional amount for charitable contributions. Points Petitioner presented a copy of a settlement statement to substantiate a deduction for $3,800 in “points” as a mortgage interest deduction. Petitioner testified that this was his third refinancing. Personal interest is generally not allowed as a deduction. Sec. 163(h). “Qualified residence interest”, however, is not treated as personal interest. Sec. 163(h)(2)(D). Qualified residence interest includes interest paid on “home equity indebtedness with respect to any qualified residence”. Sec. 163(h)(3)(A)(ii). Home equity indebtedness is indebtedness, other than “acquisition indebtedness”, secured by a qualified residence, to the extent that it does not exceed the fair market value of the residence, reduced by the amount of the acquisition indebtedness. Sec. 163(h)(3)(C). Acquisition indebtedness is the indebtedness secured by the residence that was incurred in acquiring, constructing, or substantially improving the qualified residence. Sec. 163(h)(3)(B)(i). The maximum amount that can be treated as home equity indebtedness is $100,000. Sec. 163(h)(3)(C)(ii). Petitioner’s loan amount was $170,000. Petitioner has provided no evidence of the amount of the acquisition indebtedness, if any, or the fairPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011