2011 Instructions For Schedule A (Form 1040) (Page 6 of 14) in pdf

Line 10

Refinancing.

Generally, you must deduct

Interest You Paid

points you paid to refinance a mortgage

Enter on line 10 mortgage interest and

over the life of the loan. This is true even if

Whether your interest expense is treated as

points reported to you on Form 1098 under

the new mortgage is secured by your main

investment interest, personal interest, or

your social security number (SSN). If this

home.

business interest depends on how and when

form shows any refund of overpaid interest,

If you used part of the proceeds to im-

you used the loan proceeds. See Pub. 535

do not reduce your deduction by the refund.

prove your main home, you may be able to

for details.

Instead, see the instructions for Form 1040,

deduct the part of the points related to the

line 21. If you and at least one other person

improvement in the year paid. See Pub. 936

In general, if you paid interest in 2011

(other than your spouse if filing jointly)

that applies to any period after 2011, you

for details.

were liable for and paid interest on the

can deduct only amounts that apply for

mortgage, and the interest was reported on

If you paid off a mortgage

2011.

early, deduct any remaining

Form 1098 under the other person’s SSN,

TIP

points in the year you paid off

report your share of the interest on line 11

the mortgage. However, if you

(as explained in the line 11 instructions on

Lines 10 and 11

refinanced your mortgage with the same

this page).

lender, see Mortgage ending early in Pub.

Home Mortgage Interest

If you paid more interest to the recipient

936 for an exception.

than is shown on Form 1098, see Pub. 936

A home mortgage is any loan that is se-

to find out if you can deduct the additional

cured by your main home or second home.

interest. If you can, attach a statement ex-

Line 13

It includes first and second mortgages,

plaining the difference and enter “See at-

home equity loans, and refinanced mort-

Mortgage Insurance

tached” to the right of line 10.

gages.

Premiums

A home can be a house, condominium,

If you are claiming the mort-

Enter the qualified mortgage insurance pre-

cooperative, mobile home, boat, or similar

gage interest credit (for holders

miums you paid under a mortgage insur-

property. It must provide basic living ac-

of qualified mortgage credit

ance contract issued after December 31,

commodations including sleeping space,

certificates issued by state or lo-

2006, in connection with home acquisition

toilet, and cooking facilities.

cal governmental units or agencies), sub-

debt that was secured by your first or sec-

tract the amount shown on Form 8396, line

ond home. Box 4 of Form 1098 may show

Limit on home mortgage interest.

If you

3, from the total deductible interest you

the amount of premiums you paid in 2011.

took out any mortgages after October 13,

paid on your home mortgage. Enter the re-

If you and at least one other person (other

1987, your deduction may be limited. Any

sult on line 10.

than your spouse if filing jointly) were lia-

additional amounts borrowed after October

ble for and paid the premiums in connec-

13, 1987, on a line-of-credit mortgage you

Line 11

tion with the loan, and the premiums were

had on that date are treated as a mortgage

reported on Form 1098 under the other

If you did not receive a Form 1098 from the

taken out after October 13, 1987. If you

person’s SSN, report your share of the pre-

recipient, report your deductible mortgage

refinanced a mortgage you had on October

miums on line 13. See Prepaid mortgage

interest on line 11.

13, 1987, treat the new mortgage as taken

insurance premiums below if you paid any

out on or before October 13, 1987. But if

premiums allocable to any period after

If you bought your home from the recip-

you refinanced for more than the balance of

2011.

ient, be sure to show that recipient’s name,

the old mortgage, treat the excess as a mort-

identifying number, and address on the

Qualified mortgage insurance is mort-

gage taken out after October 13, 1987.

dotted lines next to line 11. If the recipient

gage insurance provided by the Department

is an individual, the identifying number is

of Veterans Affairs, the Federal Housing

See Pub. 936 to figure your deduction if

his or her social security number (SSN).

Administration, or the Rural Housing Serv-

either (1) or (2) below applies. If you had

Otherwise, it is the employer identification

ice (or their successor organizations), and

more than one home at the same time, the

private mortgage insurance (as defined in

number. You must also let the recipient

dollar amounts in (1) and (2) apply to the

section 2 of the Homeowners Protection

know your SSN. If you do not show the

total mortgages on both homes.

Act of 1998 as in effect on December 20,

required information about the recipient or

1. You took out any mortgages after Oc-

2006).

let the recipient know your SSN, you may

tober 13, 1987, and used the proceeds for

have to pay a $50 penalty.

Mortgage insurance provided by the De-

purposes other than to buy, build, or im-

partment of Veterans Affairs and the Rural

prove your home, and all of these mort-

If you and at least one other person

Housing Service is commonly known as a

gages totaled over $100,000 at any time

(other than your spouse if filing jointly)

funding fee and guarantee fee respectively.

during 2011. The limit is $50,000 if mar-

were liable for and paid interest on the

These fees can be deducted fully in 2011 if

ried filing separately. An example of this

mortgage, and the other person received the

the mortgage insurance contract was issued

type of mortgage is a home equity loan

Form 1098, attach a statement to your re-

in 2011. Contact the mortgage insurance

used to pay off credit card bills, buy a car,

turn showing the name and address of that

issuer to determine the deductible amount

or pay tuition.

person. To the right of line 11, enter “See

if it is not included in box 4 of Form 1098.

attached.”

2. You took out any mortgages after Oc-

Prepaid mortgage insurance premiums.

tober 13, 1987, and used the proceeds to

you paid qualified mortgage insurance pre-

buy, build, or improve your home, and

miums that are allocable to periods after

Line 12

these mortgages plus any mortgages you

2011, you must allocate them over the

took out on or before October 13, 1987,

shorter of:

Points Not Reported on

totaled over $1 million at any time during

•

The stated term of the mortgage, or

2011. The limit is $500,000 if married fil-

Form 1098

•

84 months, beginning with the month

ing separately.

Points are shown on your settlement state-

the insurance was obtained.

ment. Points you paid only to borrow

If the total amount of all mort-

money are generally deductible over the

The premiums are treated as paid in the

gages is more than the fair mar-

life of the loan. See Pub. 936 to figure the

year to which they are allocated. If the

ket value of the home,

amount you can deduct. Points paid for

mortgage is satisfied before its term, no

additional limits apply. See

other purposes, such as for a lender’s serv-

deduction is allowed for the unamortized

ices, are not deductible.

Pub. 936.

balance. See Pub. 936 for details.

A-6

2011 Instructions For Schedule A (Form 1040) Page 6

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