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wc6219
Contributor ⭐
November 30, 2017

Second home mortgage interest deduction

  • November 30, 2017
  • 6 replies
  • 8489 views

For those who are deducting interest on loans covering vacation/second homes and RVs considered vacation/second homes, have you noticed that the proposed tax changes would eliminate the deductibility of interest on those? This applies to loans already in existence and those acquired in the future. No grandfathering here. However, if you rent out your second home and are considered a landlord who can deduct all expenses associated with rentals, then interest expenses will apply, as I read the text anyway. The proposed tax change would recognize only one residence to be eligible for mortgage interest deduction. This confuses me a bit as this would appear to be contrary legislation for the very wealthy but then they are likely to own/lease through corporate structures of one sort or another that will not be impacted by this particular change.

 

 

    6 replies

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    wc6219Author
    Contributor ⭐
    November 30, 2017

    I should have used the words "for business purposes" in defining what properties would be eligible for future deductibility of interest on second residence mortgages/loans. How many of AARP members use their vacation homes and RVs for "business purposes"? Ha ha

    G
    gruffstuff
    Contributor ⭐
    November 30, 2017

    However, if you rent out your second home and are considered a landlord who can deduct all expenses associated with rentals.

     

    So make your second home a rental, charge rent on it as you determine fit, and then rent it to yourself.

     

    Claim all the deductions and depreciate the real estate on your taxes.

    GailL1
    GailL1
    Community Champion ⭐⭐⭐
    November 30, 2017
    @gruffstuff wrote:

    However, if you rent out your second home and are considered a landlord who can deduct all expenses associated with rentals.

     

    So make your second home a rental, charge rent on it as you determine fit, and then rent it to yourself.

     

    Claim all the deductions and depreciate the real estate on your taxes.

    Are you proposing breaking the law?

    IRS - Topic No. 415 Renting Residential and Vacation Property

     

    This topic deals with an owner using a property as both a residence and rental.

     

     

    IT‘S ALWAYS SOMETHING . . . . .. . . . Roseanne Roseannadanna
    M
    mandm84
    Contributor ⭐⭐
    November 30, 2017

    Again we can thank the Far Right Plutocrats for " helping " 99% of us folk !!!

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    NikJ75433
    Contributor ⭐
    September 17, 2025

    It’s definitely confusing because the tax proposals treat a primary home very differently from a second home or vacation property. Right now, the IRS generally allows interest deductions on one main residence and one secondary residence, but the proposed changes would remove that benefit and limit it to just the primary home.

    For people who rent out their second property, the rules shift — interest and related costs may be deducted as rental expenses instead.

    If you want a straightforward breakdown of how the current deduction rules work (and how proposals might change them), this article does a good job of explaining it: https://reverse.mortgage/interest-tax-deduction

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