Description

The Deductible Home Mortgage Interest Worksheet is used to calculate the taxpayer's deductible home mortgage interest when that deduction may be subject to certain limitations.

To access the Deductible Home Mortgage Interest Worksheet within ProSeries:

1. Open the clients 1040 tax return.

2. Tap the F6 button along the top of the keyboard to bring up the Open Forms window.

3. On the keyboard tap the letters D, H and M. This will highlight the Deductible Home Mortgage Interest Worksheet which will be abbreviated as "Ded Home Mort".

4. Click OK at the bottom of the open forms window.

 

Note: For tax years prior to ProSeries 2012 the Deductible Home Mortgage Interest Worksheet is not available.

 

More information about the Deductible Home Mortgage Interest Worksheet as explained in the Help Center within ProSeries.

 

DEDUCTIBLE HOME MORTGAGE INTEREST WORKSHEET
This worksheet is designed to assist you in calculating the taxpayer's deductible home mortgage interest when that deduction may be subject to certain limitations. Generally, home interest is deductible on Schedule A if it is interest paid on debt secured by your main
or second home.


If your debt fits into one or more of the following three categories, your interest deduction is not limited and you need not fill out this worksheet.


1. Mortgages taken out on or before October 13, 1987 (grandfathered debt).


2. Mortgages taken out after October 13, 1987 to buy, build, or improve your main or second home (home acquisition debt) only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately).


3. Mortgages taken out after October 13, 1987, other than to buy, build, or improve your main or second home (home equity debt) only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more that the
fair market value of your home reduced by (1) and (2).


If your mortgages do not fit any of the three categories above, complete the worksheet. The worksheet assumes all interest amounts were reported on a Form 1098 therefore the resulting interest and points calculation will transfer to line 10 of Schedule A. If any of the
amounts were not reported on a Form 1098, you will need to reduce the Schedule A, line 10 amount accordingly and enter that amount on Schedule A, line 11 instead. Any points entered on line 12 of Schedule A will be multiplied by the ratio appearing on line 11 of this
worksheet. This worksheet will not calculate any office in home or vacation rental portion of the interest deduction. You will have to adjust the interest amounts on Schedule A and other affected forms and/or schedules if the home was also used for office in home or as a
vacation rental.


Interest Paid in the current tax year
Enter the interest paid on up to five qualified home loans.


Points Paid in the current tax year
Enter the fully deductible points paid on up to five qualified home loans. Do not enter amortizable points here.


Months loan outstanding
Enter the total number of months the loan was outstanding for up to five qualified home loans.


Principal paid on loan in the current tax year
Enter the total principal on each loan. The program assumes the payments were
made evenly over the period the loan was outstanding. The principal is applied to the loan
balances in the following order if the loan consists of more than one type of debt:
- First, to home equity debt.
- Next, to grandfathered debt.
- Last, to home acquisition debt.


Home Acquisition Debt
Home acquisition debt is debt that is taken out after October 13, 1987 to buy, build or
substantially improve a main or second home that secures that debt. Enter the beginning of
year balance on up to five qualified loans and any additional amounts borrowed during
the current tax year. The program will determine the average home acquisition loan balance and interest
allocated to that loan based upon your entries.


Home Equity Debt
Home equity debt is debt that is taken out after October 13, 1987 other than to buy, build or
substantially improve a main or second home that secures that debt. Home acquisition debt
that exceeds the $1 million ($500,000 for married filing separately) limit can qualify as home
equity debt but should still be entered as home acquisition debt on this worksheet. Enter the
beginning of year balance on up to five qualified loans and any additional amounts
borrowed during the current tax year. The program will determine the average home equity loan balance
and interest allocated to that loan based upon your entries.


Grandfathered Debt
Grandfathered debt is debt that is taken out before October 14, 1987 and is not limited.
However it reduces the $1 million ($500,000 for married filing separately) limit for home
acquisition debt and the limit based on a home's fair market value for home equity debt.
Enter the beginning of year balance on up to five qualified loans and any additional amounts
borrowed during the current tax year. The program will determine the average grandfathered loan balance
and interest allocated to that loan based upon your entries.


Additional Information - Home Acquisition Debt exceeding the limit or Home Equity Debt


Home equity debt is limited to the smaller of $100,000 ($50,000 for married filing
separately) or the total of each home's fair market value reduced (but not below zero) by the
amount of its home acquisition debt and grandfathered debt. Determine the FMV and debt
on each home on the date that the last debt was secured by the home.
Home acquisition debt in excess of the $1 million limit ($500,000 for married filing
separately) may qualify as home equity debt.


Part 3 - Deductible Home Mortgage Interest
Line 12 of the worksheet, plus any points entered multiplied by the ratio on line 11, will
transfer to Schedule A, line 10 "amount to deduct on Line 10 if different" field.