 So in any case, these are the standard deductions that need to be cleared and they were increased a few years ago. So even with the mortgage interest and property taxes, it might not be like so easy to kind of clear these. And therefore the benefit is not quite a stark for many home purchasers as it as it was before that. All right. So interest you pay the rules for deducting entries vary depending on whether the loan proceeds are used for business, personal or investment activities. See publication 535 for more information about deducting business interest expenses. So if you had a schedule C, then the interest that you paid would basically be business related or something like that. And then you would go there publication 535 for more information about the possibility of deducting it. See publication 550 for more information about deducting investment interest expenses. Now the investment interest expenses is kind of interesting and usually you think that might come into play more for more well off individuals because, but it makes sense from a normal kind of deduction standpoint, because if you borrowed money in order to make an investment, then the money, the interest that you're paying on the borrowed money is the cost of that's the rent on the borrowed money. So you would expect that would be kind of a deductible item. You can deduct qualified mortgage interest on your schedule A and interest on certain student loans on schedule one. We talked about the student loans before that's an above the line deduction. So even if you're not able to itemize, you might be able to take that. This we're talking about the itemized deductions, which means you have to clear the standard deductions to take them. Generally, that's the home loan interest. And then there's qualifications in terms of how much of that you can you can deduct. So there's that. If you use the proceeds of a loan for more than one purpose, for example, personal and business, you must allocate the interest on the loan to each use. So here's where it gets, of course, messy because when you take out a loan, you may have to specify what you're using it on and so on, but you might use it for multiple different things. And so when you're getting the loan, it might be easy to get one loan that you're then allocating to multiple things. And when you're talking to the bank in order to get better rates, it's often useful to secure the loan in some way with something as collateral so that if you don't pay the loan, the bank has a recourse and the most valuable and stable thing that most people have is a home. So now you've got this situation where if I take a loan out, I might have used the proceeds for different types of things and collateralized it with a personal asset or a business asset or whatnot, and that's where it gets kind of messy and you have to allocate the proceeds to the proper place. So you allocate interest on a loan in the same way as the loan is allocated. So you do this by tracing disbursements of the debt proceeds to specific uses. So how would you allocate the interest? The general idea you would think conceptually would be, well, I took out $100,000 loan, I paid 40% of it for this use, business use, and 60% of it for personal use. And therefore you would think you would use those same kind of ratios on the interest payments of the loan would be one way that you might conceptualize how you do that kind of allocation. But if you're in that situation for more information, you can go to Allocating Interest C Publication 535. In general, if you paid interest in 2022 that applies to any period after 2022, you can deduct only amounts that apply to 2022. So we have this same problem here in that if we're in a cash-based system, you might say, well, I'm just going to prepay all the interest. You could, people come up with schemes like this, they're going to say, I'm going to just prepay the interest so I get more deductions upfront sooner at this point in time. And the IRS is going to limit that by saying, no, you can't, you know, we're going to limit the amount of prepayment that you can make. And so anytime you get that idea, I'm going to make a big prepayment and lower my taxes now, then, you know, make sure that you check if you can do that. So you schedule A to deduct qualified home mortgage interest and investment interest. So line eight, home mortgage interest, a home mortgage is any loan that is secured by your main home or second home, regardless of how the loan is labeled. So it includes first and second mortgages, home equity loans, and refinance mortgages. So that's the general concept when you purchase the home. Usually people can't pay just cash for the home. They take out a loan on the home and the loan is going to use the home as collateral. Therefore if you default on the home, then the bank could have recourse to it. Some people kind of confuse that whole term and say the bank owns the home, by the way, which is kind of annoys me sometimes because it's not exactly right, right? You own the home and the home is on as collateral, because the bank, the bank can't come to your home and decide to paint your home gray or something like that, because they don't own your home, even if you even if you financed 80% of it, right? They can't decide what to do with the home. But if you default on the loan, then they have limited recourse of recall in the home, right? You know, foreclosing, I should say. So a home can be a house, condominium, cooperative, mobile home, boat, or smaller property. It must provide basic living accommodations, including sleeping space, toilet, and cooking facilities. So you can get into this issue of what qualifies for a home. It's a pretty broad qualification, as you can see here, for a home, actually, you know, but you have to have the general amenities that would be necessary for a home. So check the box on line eight. If you had one or more home mortgages in 2022, with an outstanding balance, you didn't use all of your home mortgage proceeds from those loans to buy, build, or substantially improve your home. Purchase paid on home mortgage proceeds used for other purposes isn't deductible on lines 8A and 8B. So now we get into this kind of messy situation where, obviously, if you purchased the home and you got the loan for the purchase of the home, it's pretty straightforward. If you refinanced the home or something like that, and then you used the proceeds for rebuild or adding to the home or something like that, it's still like you're investing in the home, but that's different than taking a loan out using the home as collateral, because the bank would still like to use the home as collateral, even if you took the money and bought a $100,000 car or something like that, which you would assume isn't something that the IRS would want to be incentivizing typically. So now you've got this weird situation where it looks kind of like a loan that might be deductible because they used the home as collateral, but they didn't actually use the money for the purchase of the home. They used it to buy a car, which isn't something you think would be. So see limitations on home mortgage interest later for more information about what interests you can include on lines 8A and 8B. Tip, if you are a homeowner who received assistance under a state housing finance agency, Hardest Hit Fund program or an emergency homeowner's loan program, you can see publication 530 for the amount you can deduct online 8A or B. Tip, if you used any home mortgage proceeds for a business or investment purpose, interest you paid that is allocable to those proceeds may still be deductible as a business or investment expense elsewhere on your return, meaning you used the home as kind of collateral for proceeds that might have gone somewhere else, but they were business related, and if they're business related, even though you used the home, a personal asset as collateral, you would think you might be able to deduct the interest as a business deduction in that case because you took the loan out for the business.