Sep 10, 2009

Your mortgage & the IRS

Rumor has it that the Internal Revenue Service is more closely examining how taxpayers are reporting mortgage interest deductions. If your tax returns include high deductions for mortgage interest, the IRS may be examining it more closely. Reportedly, they are enforcing obscure rules that most homeowners and their accountants are unfamiliar with.

The mortgage deduction rules are mind-boggling and the calculations are so complex and require precises records that many home owners may have trouble producing and translating them. Don't try this at home by yourself.
If you have borrowed more than $1 million in mortgages and/or home equity loans since 1987 (the year deductiblity limits were enacted), experts are advising that you consult a tax expert as to which loans are tax deductible.

I'm not an accountant, but I know the IRS folks are not ones that you want to mess with. People can file bankruptcy, leave creditors holding the bag, walk away from their debts, etc. Most believe their homestead can't be touched - and they are mostly right. But the IRS will always get their money - and they can take your home.
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