Mortgage interest is deductible on a tax return if you are itemizing. How much is deductible depends on when loan was originated, what was the amount and how proceeds were used.
In most cases, you can deduct all of your home mortgage interest for your primary residence. But what about that vacation home? Can one deduct mortgage interest on a second home?
Yes, but there are certain conditions that needs to be met:
1.If you have a property that is not your primary residence, and it’s not rented out or hold for resale during a year, this property qualifies as a second home, and mortgage interest might be deductible. Beauty of it, that taxpayer does not need to use a home during a year.
2.If you rent out part of the year, you also must use it during same year. Owner must use the property more than 10% of days rented or 14 days, whichever is longer. For example: if the house is rented for 20 days, 10% more than rented days is 3 day, which is less than 14, so taxpayer needs to use a house for 14 days, in order to be able to get deduction.
3.If you have more than 1 second house, you have to chose which one will be your second home.