I won’t benefit from deducting mortgage interest this year. Can it be carried forward to future returns?
No.
However, if you just bought the house and some of the interest is points, the points can be taken either in the first year as an itemized deduction or prorated over the life of the loan.
I work in US, but my family is in Canada, and we bought house in Canada (no house in US). Wonder whether the mortgage interest paid in 2008 is tax deductible. Thanks.
Sorry, I forgot to mention the question is about the deduction in US income tax return.
Yes it is. However, you should talk to a professional as there could be a requirement for you to withhold 30% of the payment and then the bank would have to claim this back from the government. As no bank would want to do this, they would just increase your payment by enough to cover the withholding, which you would not want. So, talk to an expert first.
I prepared my tax return, and my 1098-T
said I had roughly $2,000 of mortgage interest paid. After getting my refund I get a corrected 1098-T saying I only have roughly $100 of mortgage interest. The remaining was paid at closing. Do I need to file a 1040X?
No, the interest is deductible. It is the same as if you paid it from your monthly payments.
At closing you pay interest for the rest of the days of the month you close in so that when you make your first mortgage payment it is not a negative amortization, that is to ensure you do not owe more interest as of the date of first than the amount of your monthly payment.
I own a home in common with another person. We’re not married. We’re both named on the mortgage and we pay the mortgage out of a joint checking account, to which we both contribute and use for other various purposes. Can we split the mortgage interest deduction between us however we wish as long as we total up on our two returns to the total amount we jointly paid to the bank? Or must we use some kind of formula? How will the bank report this interest paid to the IRS?
You can split the total paid between your returns. You are supposed to split it by the proportion each of you actually paid.
The bank will report it all under the ss# of the primary person on the loan. If you are splitting it, you should include an explanation with your returns.