Knowledge Base

10641: 1098 - Mortgage Interest Deduction Limitation

1040 Individual

How do I determine the limit for a taxpayer with a mortgage in excess of the limit?


You can use the DEDM screen to generate worksheet Wks DEDINT in view mode. This worksheet calculates the amount of mortgage interest that is deductible. A link to this screen is also available on the A and 1098 screens (click the link that says Loan Limit Worksheet). 

In order for the calculated amount to flow to Schedule A, you must check the box on the bottom of the Loan Limit Worksheet screen to "carry deductible interest to Schedule A only." If you do not check the box, you must prorate the calculated amount to any form or schedule to which the amount applies.

Note: If you use the DEDM Deductible Mortgage Interest screen, do not use any of the 1098 screens. Return Note 634 generates if you have made entries on both screens. 

See Publication 936, for details on determining whether the mortgage interest is fully deductible, or, If a limit applies, calculating the allowable mortgage interest that is deductible.

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