Question

Same facts as the prior problem, what is the total amount of itemized deductions for mortgage interest and real estate taxes related to the condo?

Answer 1

Mortgage interest

  Mortgage interest is the percentage charged on a mortgage that must be paid in addition to the principal.Mortgage interest rate is related to prevailing interest rate levels and maybe fixed or adjustable. Fixed mortgages have identical amortized payments for the life of the loans.

Mortgage Amount

original or expected balance for your mortgage.

Taxpayer can deduct the interest paid on first and second mortgages upto $1,000,000 in mortgage debt(the limit is $500,000 if married and filed separately. )Any interest paid on first or second mortgages over this amount is not tax deductible.

Condo

In a condominium (commonly known as condo)some parts such your residence are owned privately,while others such as common areas owned collectively by all the condominium's owners.A less technical way to think of a condo is as an appartment that you own.In practice, condos often take the form of an appartment or a similar shared complex, such as row townhouses ,but theoretically a condo could physically be any kind of shared buildings.

If you own a condominium,the real estate taxes you pay on your separate units are deductible upto $10,000 annual limit.in addition you may deduct your pro rata share of property tax paid on a common areas by your house owners association.

In general, property tax on a condo are 1.5 percent to 2.5 percent of the appraised property value.