 so schedule c or something like that limits on home mortgage interest your deduction for home mortgage interest is subject to a number of limits if one or more of the following limits applies see publication 936 to figure your deduction so limit for loan proceeds not used to buy build or substantially improve your home so that's generally what you think you're doing with the loans right when you first buy the home you get a loan so you can buy the home when you when you refinance the loan you're refinancing usually to get a better rate but you might be pulling out money and if you refinance and pull out money from the loan if you're using that to build or improve the home it's still kind of going into the home but if you use it for other reasons that's when it gets uh messy because very messy now now that's a different situation so you can only deduct home mortgage interest to the extent that the loan proceeds from your home mortgage are used to buy build or substantially improve the home securing the loan qualifying debt so that's the term qualifying debt so make sure to check the box on line eight if you had one or more home mortgages in 2022 with an outstanding balance and you didn't use all the loan proceeds to buy build or substantially improve the home so the only exception to this limit is for loans taken out on or before october 13 1987 the loan proceeds for these loans are treated as having been used to buy build or substantially improve the home see publication nine three six for more information about loans taken out on or before october 13 1987 so they changed the laws and they had to you know have a cutoff dates in terms of what loan qualifications were and so on and we have this similar thing that we've seen in the past whereas if people planned on the law being the same before on this long term kind of planning thing because we're talking about these long term loans a 30 year loan oftentimes and you want to change the rule because the last rule was stupid then you can't really change it retroactively for deals that have already been made so we end up with these cutoffs to try to fix things going forward without hurting the people that made decisions based on the stupid law that would happen before whatever but you know that was the law and they that's what they made the decision on so that's they're not stupid it's the law is stupid but then they made the decision on the law that was any kid see publication nine three six to figure your deduction if you must check the box online eight limit on loans taken out on or before december 15 2017 for qualifying debt taken out on or before december 15 2017 you can only deduct home mortgage interest on up to one million dollars or five hundred thousand if you are married filing separate of that debt so when you first look at that one million dollar number you might think that's the home purchase price but no we're talking about the amount related to the debt so normally when you purchase the home you have the amount of the purchase price possibly putting 20 percent down or something like that and then the financed amount the financed amount is what we are talking about here so for most people that's a fairly high number however if you're in a high cost of living area in or dealing with more wealthy individuals they can hit basically that number they can hit that cap and then the question is if that happens how are you going to be allocating the interest because you're going to get a 1098 and then the question is how much of that interest is going to be deductible if you're dealing with a loan that is over the cap so the only exception is for loans taken out on or before october 13 1987 you can see publication nine three six for more information about loans taken out on or before october 7 october 13 1987 so we've got some kind of some some key points or dates when laws have changed and this is common when you're dealing with tax law that's going to have a significant impact in planning over time such as we have here because the mortgage interest is going to affect people's long-term planning as they're taken out loans that might be taken out for like fit for like 30 years so now when they put in a law oftentimes they're going to say okay you made your 30 year long decision or whatever based on the prior law so we're going to try to put the new law in so it doesn't mess up your decision making in the past and it's going to be applicable for this point going forward that adds more confusion to the code but you can see why they might do that and also just know if there's no requirement that they will do that it's possible that the law could be put in place and just change the rule altogether at this point in time but oftentimes to try to make everybody happy they're going to put the law in place to kind of change things from one point going forward so see publication nine three six to figure your deduction if you have loans taken out on or before december 15 2017 that exceed one million dollars five hundred thousand if you are married filing separately so if you hit that situation where you're over that one million and you have the loan taken out before december 15th to figure out the interest allocation you can go to publication nine three six for more detail limit on loans taken out after december 15th 2017 so now we've got the cut off date and we're after that point in time for qualifying debt taken out after december 15 2017 you can only deduct home mortgage interest on up to 750 000 this also being the rule that we want to kind of keep in mind at this point in time when when people are thinking about renting or purchasing a home and so on how much of the of the interest might be deductible and what not so it's 375 000 if you are married filing separately of that debt so same kind of thing applies here if you also have qualifying debt subject to one million dollar limitation discussed under uh under limit on loans taken out on or before december 15 2017 earlier the 750 000 limit for debt taken out after december 15 2017 is reduced by the amount of your qualifying debt subject to the limit on the one million dollar limit and then an exception exists for certain loans taken out after december 15 2017 but before april first 2018 if the exception applies your loan may be treated in the same manner as a loan taken out on or before december 15 2017 if that case applies you can see publication nine three six for more information about this exception and then you could see publication nine three six to figure your deduction if you have loans taken out after october 13 1987 that exceed 750 000 uh 375 000 if you are married filing separately so if you have more wealthy individuals or you're dealing with someone that's in a high cost of living area that has a you know high loan amount you can go into that publication to try to figure out the amount of the interest that is deductible in that situation