How do I determine the limit for a taxpayer with a mortgage in excess of the limit?
Beginning in Drake17, located on the Schedule A and the 1098 - Mortgage Interest screens is a link to the Loan Limit Worksheet.
Completing this screen will produce a worksheet Wks DEDINT in view mode that will calculate the allowable mortgage interest that is deductible.
In order for the calculated amount to flow to your Schedule A, you must check the box on the bottom of the Loan Limit Worksheet to "carry deductible interest to Schedule A only."
Note: If you do not check the above mentioned 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. 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.