Comment by junar
2 years ago
The $750,000 amounts to a cap on the deduction. If your mortgage is in excess of that amount, you would pro-rate the deductible interest accordingly.
I think it's reasonable to say that the folks with the largest mortgages are the ones most likely to itemize mortgage interest, even if they are capped.
Yeah, that is what I was trying to convey with regards to the interest deduction being capped, not that the deduction just stopped. I think I was a bit muddled with my second point as I was trying to suggest by the time you are at a very high income level, your deductions are primarily made of other things, because the mortgage interest deductions can only be so large. That's indeed what the underlying data from the IRS shows as you go up in income past $500k a year comparing column 91 (total home mortgage interest deducted by itemized filers) to column 61 (total itemized deductions) in the ridiculously massive table that the the Tax Policy Center summarizes from that starts on page 137: https://www.irs.gov/pub/irs-pdf/p1304.pdf