Instructions For Schedule A (Form 1040) - Itemized Deductions

ond home. Box 4 of Form 1098 may show

mortgage is satisfied before its term, no

2. You have no other deductible invest-

the amount of premiums you paid in 2011.

deduction is allowed for the unamortized

ment expenses.

If you and at least one other person (other

balance. See Pub. 936 for details.

3. You have no disallowed investment

than your spouse if filing jointly) were lia-

interest expense from 2010.

The allocation rules, explained earlier,

ble for and paid the premiums in connec-

do not apply to qualified mortgage insur-

tion with the loan, and the premiums were

ance provided by the Department of Veter-

reported on Form 1098 under the other

Alaska Permanent Fund divi-

ans Affairs or the Rural Housing Service

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

dends, including those reported

(or their successor organizations).

miums on line 13. See Prepaid mortgage

on Form 8814, are not invest-

insurance premiums below if you paid any

ment income.

premiums allocable to any period after

Limit on amount you can deduct.

You

2011.

cannot deduct your mortgage insurance

For more details, see Pub. 550.

premiums if the amount on Form 1040, line

Qualified mortgage insurance is mort-

38, is more than $109,000 ($54,500 if mar-

gage insurance provided by the Department

ried filing separately). If the amount on

of Veterans Affairs, the Federal Housing

Form 1040, line 38, is more than $100,000

Gifts to Charity

Administration, or the Rural Housing Serv-

($50,000 if married filing separately), your

ice (or their successor organizations), and

deduction is limited and you must use the

private mortgage insurance (as defined in

You can deduct contributions or gifts you

Mortgage Insurance Premiums Deduction

section 2 of the Homeowners Protection

gave to organizations that are religious,

Worksheet to figure your deduction.

Act of 1998 as in effect on December 20,

charitable, educational, scientific, or liter-

2006).

ary in purpose. You can also deduct what

you gave to organizations that work to pre-

Mortgage insurance provided by the De-

Line 14

vent cruelty to children or animals. Certain

partment of Veterans Affairs and the Rural

whaling captains may be able to deduct

Housing Service is commonly known as a

Investment Interest

expenses paid in 2011 for Native Alaskan

funding fee and guarantee fee respectively.

subsistence bowhead whale hunting activi-

These fees can be deducted fully in 2011 if

Investment interest is interest paid on

ties. See Pub. 526 for details.

the mortgage insurance contract was issued

money you borrowed that is allocable to

in 2011. Contact the mortgage insurance

property held for investment. It does not

To verify an organization’s charitable

issuer to determine the deductible amount

include any interest allocable to passive ac-

status, you can:

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

tivities or to securities that generate tax-ex-

•

empt income.

Check with the organization to which

Prepaid mortgage insurance premiums.

you made the donation. The organization

you paid qualified mortgage insurance pre-

Complete and attach Form 4952 to fig-

should be able to provide you with verifica-

miums that are allocable to periods after

ure your deduction.

tion of its charitable status.

2011, you must allocate them over the

•

shorter of:

See Pub. 78 for a list of most qualified

You do not have to file Form

Exception.

•

organizations. You can access Pub. 78 at

The stated term of the mortgage, or

4952 if all three of the following apply.

under Search for

•

84 months, beginning with the month

Charities .

1. Your investment interest expense is

the insurance was obtained.

•

not more than your investment income

Call our Tax Exempt/Government En-

from interest and ordinary dividends minus

tities Customer Account Services at

The premiums are treated as paid in the

year to which they are allocated. If the

any qualified dividends.

1-877-829-5500.

Mortgage Insurance Premiums Deduction Worksheet—Line 13

Keep for Your Records

Before you begin:

See the instructions for line 13 to see if you must use this worksheet to figure your

deduction.

1. Enter the total premiums you paid in 2011 for qualified mortgage insurance for a contract issued after

December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Enter the amount from Form 1040, line 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Enter $100,000 ($50,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . 3.

4. Is the amount on line 2 more than the amount on line 3?

No.

Your deduction is not limited. Enter the amount from line 1 above on

Schedule A, line 13. Do not complete the rest of this worksheet.

Yes. Subtract line 3 from line 2. If the result is not a multiple of $1,000 ($500

if married filing separately), increase it to the next multiple of $1,000

($500 if married filing separately). For example, increase $425 to $1,000,

increase $2,025 to $3,000; or if married filing separately, increase $425

to $500, increase $2,025 to $2,500, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Divide line 4 by $10,000 ($5,000 if married filing separately). Enter the result as a decimal. If the

result is 1.0 or more, enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6. Multiply line 1 by line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7. Mortgage insurance premiums deduction. Subtract line 6 from line 1. Enter the result here and on

Schedule A, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

A-7

Instructions For Schedule A (Form 1040) - Itemized Deductions - 2011 Page 7

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