Is PMI tax deductible in 2008?
Q: I have been paying PMI on the mortgage since I bought my duplex in July of 2007. I didn't write anything off. I understand that I could, but my accountant missed that. Is PMI paid in 2008 tax deductible? What about 2009 and beyond? If yes, is that for personal residence only? I am getting conflicting responses, clarify please.
A: Private Mortgage Insurance is fully tax deductible for all borrowers who purchased a home or refinanced a home using PMI on or after January 1, 2007 and who have Adjusted Gross Income below the $100,000 threshold or $50,000 if you are married and filing separately. For Adjusted Gross Incomes between $100,000 and $109,000, the PMI deduction phases down - it is reduced by 10% for each $1,000 over $100,000 threshold. Once your AGI goes over $109,000 or $54,500 if married and filing separately, the deduction is basically gone. So if you make more, your accountant didn't miss anything.
The other restriction is placed on refinanced loans. If your current mortgage amount exceeds the original mortgage on a purchase made before January 1, 2007, e.g. you did cash out refinance sometime in 2007 or 2008 and are paying PMI, only PMI portion paid on original loan is tax deductible. How long it is going to be tax deductible? PMI Deduction Act, initially approved only for 2007 has been extended until 2010 and is available for your personal residence and a non-rental second home. So your vacation house qualifies just fine as long as it is not rented off season. What is going to happen next, no one knows.
Mon Jan 26, 2009 10:01PM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
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