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Screen MortgInt - Home Mortgage Interest Limitations (1040)

Overview

The information entered in the MortgInt screen transfers to Schedule A. Make sure the information you enter in this input screen doesn't duplicate deductions that you've entered elsewhere.

Home Mortgage Interest Limitations

If the taxpayer's mortgage interest deduction must be limited due to the amount or nature of the loans, enter the mortgage information in this section. UltraTax CS uses the information entered to complete the Home Mortgage Limitation Worksheet A and the Mixed Use Mortgage Worksheets. With regard to these worksheets, please note the following:
  • UltraTax CS produces 1 Worksheet A and an unlimited number of Mixed Use Mortgage Worksheets. A mixed use mortgage summary reporting the average balance of all loans will print on the last unit of the Mixed Use Mortgage Worksheet.
  • The Mixed Use Mortgage Worksheets calculate the average balance for each type of debt by determining the balance for each category of debt for each month the loan was outstanding, adding the monthly balances together, and dividing by 12. The calculated average balance amounts transfer from the Mixed Use Mortgage Worksheets to Home Mortgage Limitation Worksheet A.
  • Additional amounts borrowed against existing loans should be entered in a separate unit of the MortgInt screen.
Enter the date the loan was taken out. Per IRS Publication 936, “The date you take out your mortgage is the day the loan proceeds are disbursed. This is generally the closing date. You can treat the day you apply in writing for your mortgage as the date you take it out. However, this applies only if you receive the loan proceeds within a reasonable time (such as within 30 days) after your application is approved.”
Whether the loan is the initial/original acquisition loan, a refinanced loan, a home equity loan, etc., use the date the applicable loan was taken out. If more than 1 loan exists for the same home, complete a separate MortgInt screen for each loan secured by the residence.
Enter the fair market value of the qualified homes as of the date the debt was last secured to calculate line 7 of Worksheet A. If you leave this field blank, UltraTax CS assumes the fair market value is 0.
If the loan wasn't outstanding all year, enter the number of months the loan was outstanding. UltraTax CS uses this number to calculate total principal payments applied to the monthly loan balance and to calculate the average balance of the loan.
Enter the number of months the home was a qualifying home, if different from the number of months the loan was outstanding. If the MortgInt screen is being completed for a 2nd loan, home equity loan, or a refinanced loan, on an existing home, and the taxpayer owned the home for the entire year, enter
12
 in this field. UltraTax CS will use the entry in this field in place of the number of months the loan was outstanding to determine the average loan balance for the current year. A qualified home can be a principal residence or a second home, and includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property with sleeping, cooking, and toilet facilities.
Enter the total principal payments made during the current tax year. The amount entered in this field is used to calculate the ending balance of the loan. If the loan is a mixed-used loan, principal payments are applied to the loan balances in the following order.
  1. Home equity debt
  2. Grandfather debt
  3. Home acquisition debt
Total principal payments transfer to the Mixed Use Mortgage Worksheets, line 1.
Enter the mortgage interest paid for the loan during the current tax year. If UltraTax CS determines this amount is fully deductible, it transfers to Schedule A, line 10. Otherwise, it transfers to line 10 of Worksheet A.
Enter the points reported on Form 1098. If UltraTax CS determines this amount is fully deductible, it transfers to Schedule A, line 12. Otherwise, it transfers to Worksheet A, line 14.
Enter
X
 in this field if the mortgage interest paid on the loan wasn't reported on Form 1098, Mortgage Interest Statement. Deductible mortgage interest not reported on Form 1098 is included on Schedule A, line 11. In addition, complete the
Recipient name
,
Recipient SSN or EIN
,
Recipient address
, and
Recipient city, state, zip
 fields on this screen to avoid a $50 penalty.
If the taxpayer paid mortgage interest to the person from whom the home was purchased, enter the name, identifying number (social security number or employer identification number) and address in the fields provided. Failure to include this information on the return may result in a $50 penalty.
Enter the amount of grandfather debt as of 12/31/
2023
 (or the first day the mortgage was outstanding). An amount entered here transfers to line 4 of the Mixed Use Mortgage Worksheet.
UltraTax CS calculates the ending balance of grandfather debt by subtracting the amount entered in the
Principal payments made in
2024
 field from the amount entered in the
Grandfather debt: Beginning Balance
 field. If the ending balance of grandfather debt differs from the calculated amount, enter the amount in this field. An amount entered here transfers to line 5 of the Mixed Use Mortgage Worksheet.
Enter the amount of home acquisition/improvement debt as of 12/31/
2023
 (or the first day it was outstanding). An amount entered here transfers to line 9 of the Mixed Use Mortgage Worksheet.
UltraTax CS calculates the ending balance of home acquisition/improvement debt by subtracting the amount entered in the
Principal payments made in
2024
 field from the amount entered in the
Home acquisition/improvement debt: Beginning Balance
 field. If the ending balance of home acquisition/improvement debt differs from the calculated amount, enter the amount in this field. An amount entered here transfers to line 10 of the Mixed Use Mortgage Worksheet.
Enter the amount of home equity debt as of 12/31/
2023
 (or the first day it was outstanding). An amount entered here transfers to line 3 of the Mixed Use Mortgage Worksheet.
UltraTax CS calculates the ending balance of home equity debt by subtracting the amount entered in the
Principal payments made in
2024
 field from the amount entered in the
Home equity debt: Beginning Balance
 field. If the ending balance of home equity debt differs from the calculated amount, enter the amount in this field. An amount entered here transfers to line 4 of the Mixed Use Mortgage Worksheet.
Enter a
1 (Average of first and last balance)
 or
2 (Average monthly balance)
 to force the average balance calculation method used to calculate the average loan balance. UltraTax CS automatically computes the average loan balance based on the loan balance information entered in the MortgInt screen. If only 1 loan type is present, UltraTax CS uses the average of the 1st and last balance method to calculate the average loan balance. If more than 1 loan type is present, indicating a mixed use loan, UltraTax CS uses the average monthly balance method to calculate the average loan balance.
Enter the average balance for mortgages secured by a qualified home that originated on or before October 13, 1987, or mortgages that refinance such debt up to the principal balance of the debt refinanced and only for the periods remaining on the original terms of the loan refinanced. Enter the excess as home acquisition or home equity debt. An amount entered in this field transfers to Worksheet A, line 1. This amount overrides the calculated average balance that transfers from the Mixed Use Mortgage Worksheet.
Enter the average balance for mortgages taken out to buy, build, or improve a qualified home after October 13, 1987. An amount entered in this field transfers to Worksheet A, line 2. This amount overrides the calculated average balance that transfers from the Mixed Use Mortgage Worksheet.
Enter the current-year average balance for all outstanding mortgages including any home equity debt (before limitation). An amount entered in this field transfers to Worksheet A, line 9 and overrides the calculated average balance that transfers from the Mixed Use Mortgage Worksheet.
To allocate mortgage interest entered in the MortgInt screen to a home office or rental property, select the form or schedule, activity, unit, or if applicable, the home ID. When these fields are completed, UltraTax CS calculates the Home Mortgage Interest Allocation Worksheet, which indicates the allocable deductible interest (post-limitation), as well as any allocable excess mortgage interest.
Use the attached statement to enter loan information when electing out of treatment of debt secured by qualified residence. UltraTax CS will automatically print the tax election with the return. If the return is being filed electronically, the tax election will be included in the electronic file.
Use the attached statement to record details about the elections taken for this MortgInt unit. The statement includes the following fields.
  • Description:
     Enter a brief description of the election taken.
  • Tax Year:
     Enter the tax year the election was taken.
  • Effective Period:
     Enter the election's effective period. Some elections are perpetual, while others only cover the tax year taken.
  • Comments:
     Enter any additional information about the election. For example, enter information about an election that was revoked.
Enter
X
 in this field to delete this unit of the MortgInt screen on next year's proforma.

Information for AMT Home Mortgage Interest Adjustment

Use this section to further classify interest amounts entered in the Home Mortgage interest Limitation section in the MortgInt screen. Amounts entered in this section are used to calculate the AMT Home Mortgage Interest Adjustment for Form 6251, line 4.
Enter the portion of home mortgage interest paid on home equity debt not used to build or improve a qualified residence. Interest paid on home equity debt is disallowed for AMT and therefore will be added back as an adjustment item when calculating alternative minimum taxable income.
Enter the portion of home mortgage interest paid on refinanced debt. Don't include any interest paid on the balance of the new loan that exceeded the balance of the original loan at the date of refinance. Interest paid on refinanced debt is generally treated as home acquisition debt and is allowed for AMT.
Enter the portion of interest paid on excess refinanced debt that was reinvested. An amount entered here transfers to the AMT version of Form 4952, line 1 and isn't included in the calculation of the AMT home mortgage interest adjustment.
Enter the portion of home mortgage interest paid on a loan originating prior to July 1, 1982. Debt of this type is treated as grandfather debt and is allowed for AMT.
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