[quote=CA renter]I need to clarify that I wasn’t suggesting eliminating the MI deduction for *primary buyers* who buy an existing home, though I’m not opposed to that, either. I’m talking about eliminating the MID for speculators and “investors” who buy existing homes.
In other words, I think that the tax code should not encourage speculation in basic necessities and commodities; it should encourage productive investments like building *new* buildings or expanding or improving productive capacity in some way (capital expenditure). I don’t think that people who are simply trying to buy food or housing should have to compete with well-funded, highly-leveraged “investors” who will greatly exaggerate price movements at the very worst times (when unusually high/low demand/supply are expected).[/quote]
????? This doesn’t make sense…
You don’t get a mortgage interest deduction for speculation homes (IE your investment property(ies)) …
MID applies to primary homes and vacation homes, as long as you stay within the 1.1 million threshold.
Interest related to “investment property” fall under “investment expense” (schedule E)…It’s no different than any any sort of investment expense that you can report either for property or for other investments for that matter…It’s considered cost of doing business….No different than other expenses related to investment properties (repair costs, upgrade costs,etc,etc,etc)…
Even taking a loan out on your primary and using it for investments is considered investment expense.. You don’t deduct it on Schedule A if you were to do that… If instead you were to use borrowed money to invest on other things (stocks/mutual funds) that would fall under investment expense for stocks/mutual funds (not suggesting one should do that necessarily)…
