Whether you own a vacation home and rent it out, looking to purchase or sell a property, or perhaps upgrade to a larger home, here are a few tax rules to consider.
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MORTGAGE INTEREST DEDUCTION
In order to deduct interest, a mortgage loan must be secured by a qualified residence, which could include a vacation home if used up to 14 days per year or 10% of the time it was rented — whichever is greater. For tax purposes, the maximum amount that can be treated as acquisition indebtedness is $1,000,000 or $500,000 if married and filing separately. If the vacation residence is used as security for a mortgage loan but the proceeds of the loan are used for investment purposes, then the interest may be…