Limitations
The aggregate amounts treated as acquisition indebtedness for any period cannot exceed $1,000,000. The amount for home equity indebtedness cannot exceed $100,000. Qualified residence interest is also subject to limitations imposed by § 263(g) - certain interest in the case of straddles, § 264(a)(2) and (4) - interest paid in connection with certain insurance, § 265(a)(2) - interest relating to tax-exempt income, § 266 - carrying charges, § 267(a)(2) - interest with respect to transactions between related taxpayers, § 465 - deductions limited by the amount at risk, § 1277 - deferral of interest deduction allocable to accrued market discount, and § 1282 - deferral of interest deduction allocable to accrued discount.
Read more about this topic: Qualified Residence Interest
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