Publication 936

Publication 936

A form published by the IRS explaining tax issues related to tax deduction for the interest paid on one's home mortgage.
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the residence is sold and the loan paid off, or the loan is refinanced), the remaining unamortized balance of the points can be deducted in that tax year, unless the mortgage loan is refinanced with the same lender, in which case the unamortized points generally must be deducted over the term of the new loan (Letter Ruling 8637058; IRS Publication 936, Home Mortgage Interest Deduction).
Taken as a whole, IRS taxpayer guidance--Schedule A and its instructions, Publication 17, Your Federal Income Tax, and Publication 936, Home Mortgage Interest Deduction--generally informed taxpayers that mortgage interest deductions are subject to limits.
As a result, shortly after the issuance of the temporary regulations, the IRS released Publication 936, Home Mortgage Interest Deduction, to provide taxpayers with further guidance.
For these purposes, any reasonable method includes both the "exact" and the "simplified" methods described in the temporary regulations, the method provided in Publication 936, or a reasonable approximation of any of those methods until final regulations specifically addressing this issue are released.
In CCA 201201017, the IRS resolves the discrepancy between the regulations and Publication 936 by advising that a taxpayer using the simplified method to determine the amount of qualified interest can use the interest tracing rules to allocate the amount of interest in excess of qualified residence interest if any of the interest is allocable to a trade or business or other deductible activity.