Seems to me it hasn’t always been the case that mortgage interest deduction on second homes has been allowed, but I can’t seem to find out when it started to be allowed. Does anybody know when? I think it occurred during a Republican period, wife doesn’t agree, who is right?
It was always deductible. The Tax Reform Act of 1986 changed the rules so that personal interest (like credit card debt and car loans) became non-deductible. It also set caps on the amount of qualified home mortgage (and 2nd home) interest that was deductible. Prior to that, substantially all interest was deductible.
.
