You can’t deduct the interest charged on mortgages above $1 million. Only up to the $1 million. So on a $1.1 million mortgage you can deduct 1/1.1 of the interest.
I believe we should elimnate the interest deduction. It only makes homes more expensive by creating false demand engineered by the tax code.
John
The reason interest is deductible has nothing to do with encouraging home ownership or any other social engineering goals. It's deductible because income should not be taxed twice.
Before 1986 all interest paid was deductible for this reason - remember? Back before the Chief Tax Collector and So-Called Republican BobDole pushed the "Tax Reform Act of 1986".
So the deduction is not a "gift" from the Beneficient and All-Knowing Legislators. It's a function of fairness and understanding the chain of taxation that has been inflicted on us.
Not only should the mortgage interest deduction be preserved, we should go back to having all interest be deductible. The only reason it was revoked in the first place was to pay for the profligacy of the federal government in the 80's. Oddly, it didn't work, and they kept spending and the deficit keeps growing.
The simple answer is to SPEND LESS. And in California that means STOP LOOTING THE AMERICANS TO PAY FOR MEXICO.