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." This box is only available in Drake21 and prior (see Related Links below for details). Note: If you do not check the box, you must prorate the calculated amount to any form or schedule to which the amount applies.
In Drake16 and prior, the software does not calculate mortgage interest deduction limits. You must calculate the amount that is deductible and enter it on screen A directly.
In Publication 936, see:
- "Figure A. Is My Home Mortgage Interest Fully Deductible?" on page 3, and the accompanying discussion. This will help you determine whether the mortgage interest is fully deductible.
- If a limit applies, "Table 1. Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year" and the accompanying instructions on page 12 will help you calculate the allowable mortgage interest that is deductible.