(Updated May 2013)
Introduced along with the Income Tax in 1913, the Mortgage Interest Deduction (MID) allows homeowners who itemize their taxes to deduct mortgage interest attributable to primary residence and second-home debt totaling $1 million, and interest paid on home equity debt up to $100,000. Though the MID is a popular tax deduction for millions of U.S. homeowners, it has become a controversial topic in recent years. This field guide highlights basics, perceived pros and cons, IRS rules, and more to get you up-to-speed on this widely-debated tax deduction.
Mortgage Interest Deduction topic page, (National Association of REALTORS®, 2012).
Debt and Deficit: A Public Opinion Dilemma, (Pew Research Center, June 14, 2012).
Rethinking the Mortgage Interest Deduction, (Video from the Tax Policy Center, Urban Institute and Brookings Institution, July 29, 2011).
The Misunderstood Mortgage Interest Deduction, (Economix Blog, The New York Times, June 15, 2011).
Home Mortgage Interest Tax Deduction, (About.com, May 27, 2011).
What's the Future of the Mortgage-Interest Deduction?, (Wall Street Journal, May 18, 2011).
History of the MID
Biography of a Dream, (Mortgage Banking, July 2011). Q
The Mortgage Interest Deduction: Background and Statistics, (National Association of Home Builders, Mar. 2012).
The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest, (UC Davis School of Law, Nov. 2009).
Historical Federalist Perspective on the Home Mortgage Interest Deduction for Federal Income Tax, (Journal of Business & Economic Research, June 2010). Q
How Does the MID Benefit Housing and Homeownership?
Unmasking the Mortgage Interest Deduction: Who Benefits and by How Much?, (Reason Foundation, July 2011).
Mortgage Interest and Real Estate Tax Deduction Facts, (Economists' Outlook blog, National Association of REALTORS®, Dec. 7, 2010).
Another Challenge to the Mortgage Interest Deduction, (Speaking of Real Estate blog, Dec. 1, 2010).
Why the MID Deserves to Stay, (REALTOR® Magazine, Sept. 2010).
Mortgage Interest Deduction Vital to Housing Market, (HouseLogic.com, Jan. 11, 2010).
Why is There Opposition to the MID?
The Distributional and Revenue Consequences of Reforming the Mortgage Interest Deduction, (National Tax Journal, Dec. 2011). Q
Who Benefits from the Mortgage Interest Deduction? Wealthy Suburbanites, (The Weekly Standard Blog, Dec. 21, 2011).
Chart of the day: Where does the mortgage-interest deduction go?, (Reuters, July 12, 2011).
Despite Benefit Disparities, Middle Class Supports Mortgage Deduction, (The New York Times, July 13, 2011).
Rebuild the Path to the American Homeownership, (Washington Post, Sept. 3, 2010).
Reforming the Mortgage Interest Deduction, (Tax Policy Center, Apr. 2010).
Rules, Forms, & Guidelines from the IRS
Home Mortgage Interest Deduction: Publication 936 (for use in preparing 2011 returns), (IRS.gov, Dec. 5, 2011).
Topic 504—Home Mortgage Points, (IRS.gov, July 21, 2010).
The IRS, MID and You
REALTORS® Urge Preserving Homeownership Tax Policies, (REALTOR® Magazine Online, Apr. 26, 2013).
Testimony of Gary Thomas, 2013 President National Association of REALTORS®, Before the United States House of Representatives (Committee on Ways and Means Hearing Titled Tax Reform and Residential Real Estate, Apr. 25, 2013).
NAR Issue Summary: Federal Tax/Mortgage Interest Deduction, (National Association of REALTORS®, 2012).
Revenue Costs and Incentive Effects of the Mortgage Interest Deduction for Owner-Occupied Housing, (National Tax Journal, June 2011). Q
Americans Oppose Eliminating Income Tax Deductions, (Gallup.com, Apr. 15, 2011).
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
How to Invest in Real Estate & Pay Little or No Taxes (Adobe eReader)
J.K. Lasser's New Tax Law Simplified 2010 (Adobe eReader)
J.K. Lasser's 1001 Deductions and Tax Breaks 2010 (Adobe eReader)
Field Guides & More
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