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2nd home tax question

We live in VA, however have a 2nd home in SC. Our CPA will not allow us to deduct the interest paid on the home in SC agents our personal income in the area of federal taxes. He tells us that we can only apply it to the home itself, and acquire the deductions when we sell it. I find this odd, especially when I can write-off my first home, as well as the other lot that I own next to our first home lot(that lot was acquired after the 2nd home), however my 2nd home can not be applied to my income to help reduce taxes which is why I bought it in the first place. We have this feeling that our CPA is wrong, because we have found things in the past that we could write-off and he did not know about it or something. Thanks for any help into this!

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Reply to
l3vi
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Can CPAs be sued for malpractice? Run, don't walk, away from this idiot and find a tax accountant who knows what he/she is talking about!

Reply to
Bob

Whoa!! Hold on! What's wrong with the CPA's advice? If you read the OP statement carefully, you will see that this house may not the second home but the third! OP is already deducting interest on two properties. We need more facts to be able to tell what is going on here but the position of the CPA is not, on the surface, outrageous. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Reply to
L K Williams

If it is your only second home mortgage interest is deductible on Schedule A (subject to the $1,000,000 acquisition indebtedness and $100,000 equity indebtedness limits). If this is your 3rd (or greater home) there is no additional Schedule A deduction for interest and there is no option of adding the interest paid to your basis.

For every $100 you pay in mortgage interest you save a max of $35 in federal income taxes. If that was your only reason for purchasing the property then you are losing money.

How many times will you allow him to be wrong before you find another tax preparer?

Reply to
Bill Brown

The third? he said the SC house was the 2nd home (personal residence), and I see why, since he's paying interest also on a lot next door to his primary residence. It would appear that that lot does not have a house on it and has been amalgamated with the land on which the primary sets. However if that lot is not part and parcel at this time of the primary lot and home, it might be investment property, right? ChEAr$, Harlan

Reply to
Harlan Lunsford

I'd consider the (empty?) lot next to the first home as part of that home's property. Even if not, it isn't a "second home". Seth

Reply to
Seth

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