Posted on: 05th Mar, 2007 10:21 am
I was told that for mortgage interest deductions, mortgage should be for a qualified home, what does qualified home mean.
Hi,
Welcome to Mortgagefit forum.
A qualified home means your primary residence (main home) or the second home.
Their can be only one primary residence at one time. This is where you live most of the time. The second home is the one which you select to treat as your second home.
One other point relating to second homes that I would like to mention is that if you have rented your second home, then would it be considered as a qualified home or not...
If you rent out your second home for some part of the year then you are required to also use it as a home during the year for it to be considered as a qualified home.
This second home should be used for more than fourteen days or more than ten percent of the no. of days the home is rented for a fair rental during the year, whichever is longer. For example, you had rented the house for 90 days, so 10% of 90 days is 9 days. You should use the home for more than 14 days as it is longer than the 10% of the time it was rented out during the year (9 days).
In case you do not use the second home as mentioned then it is not considered as second home and would be viewed as your rental property.
Colin
Welcome to Mortgagefit forum.
A qualified home means your primary residence (main home) or the second home.
Their can be only one primary residence at one time. This is where you live most of the time. The second home is the one which you select to treat as your second home.
One other point relating to second homes that I would like to mention is that if you have rented your second home, then would it be considered as a qualified home or not...
If you rent out your second home for some part of the year then you are required to also use it as a home during the year for it to be considered as a qualified home.
This second home should be used for more than fourteen days or more than ten percent of the no. of days the home is rented for a fair rental during the year, whichever is longer. For example, you had rented the house for 90 days, so 10% of 90 days is 9 days. You should use the home for more than 14 days as it is longer than the 10% of the time it was rented out during the year (9 days).
In case you do not use the second home as mentioned then it is not considered as second home and would be viewed as your rental property.
Colin
Thanks for clearly giving the details, one more question that I like to ask is what happens when I have more than one second home, which one will be a qualified second home?
Crilley,
Suppose you have two second homes apart from your main home which is your primary residence. In such situation you can treat only one of these homes as qualified second home during the year.
But you are allowed to change which home you would like to treat as the qualified second home during the year if:
Colin
Suppose you have two second homes apart from your main home which is your primary residence. In such situation you can treat only one of these homes as qualified second home during the year.
But you are allowed to change which home you would like to treat as the qualified second home during the year if:
- The home you are presently using as your primary residence (main home) no longer qualifies as your primary residence. If such a situation arises then you can select to treat this house as your second home. You can start to treat it as your second home from the day its use as primary residence is stopped.
- You purchase a new home than you can select to treat it as your second home from the day you buy it.
- You sell the second home or it becomes your primary residence during the year then you can select a new second home. The new home will be considered as your second home from the day the previous second home is sold or it is used as main home.
Colin