For use in preparing

Reminders

Publication 936

Home

Mortgage

Interest

Deduction

For use in preparing

Mortgage insurance premiums. The itemized deduction for mortgage insurance premiums has expired. You

can no longer claim the deduction.

Home equity loan interest. No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by your home to the extent the

loan proceeds weren't used to buy, build, or substantially

improve your home.

Home mortgage interest. You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately))

apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017.

Future developments. For the latest information about

developments related to Pub. 936, such as legislation

enacted after it was published, go to IRS.gov/Pub936.

2025 Returns

Photographs of missing children. The IRS is a proud

partner with the National Center for Missing & Exploited

Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring

these children home by looking at the photographs and

calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication discusses the rules for deducting home

mortgage interest.

Part I contains general information on home mortgage

interest, including points. It also explains how to report deductible interest on your tax return.

Part II explains how your deduction for home mortgage

interest may be limited. It contains Table 1, which is a

worksheet you can use to figure the limit on your deduction.

Comments and suggestions. We welcome your comments about this publication and suggestions for future

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue

Service, Tax Forms and Publications, 1111 Constitution

Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will

consider your comments and suggestions as we revise

our tax forms, instructions, and publications. Don’t send

tax questions, tax returns, or payments to the above address.

Get forms and other information faster and easier at:

• IRS.gov (English)

• IRS.gov/Spanish (Español)

• IRS.gov/Chinese (中文)

Oct 28, 2025

• IRS.gov/Korean (한국어)

• IRS.gov/Russian (Pусский)

• IRS.gov/Vietnamese (Tiếng Việt)

Getting answers to your tax questions. If you have

a tax question not answered by this publication or the How

To Get Tax Help section at the end of this publication, go

to the IRS Interactive Tax Assistant page at IRS.gov/

Publication 936 (2025) Catalog Number 10426G

Department of the Treasury Internal Revenue Service www.irs.gov

Help/ITA where you can find topics by using the search

feature or viewing the categories listed.

Getting tax forms, instructions, and publications.

Go to IRS.gov/Forms to download current and prior-year

forms, instructions, and publications.

Ordering tax forms, instructions, and publications.

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order

prior-year forms and instructions. The IRS will process

your order for forms and publications as soon as possible.

Don’t resubmit requests you’ve already sent us. You can

get forms and publications faster online.

Useful Items

You may want to see:

Publication

504 Divorced or Separated Individuals

523 Selling Your Home

527 Residential Rental Property

530 Tax Information for Homeowners

504

523

527

530

See How To Get Tax Help at the end of this publication for

information about getting these publications.

Part I. Home

Mortgage Interest

This part explains what you can deduct as home mortgage interest. It includes discussions on points and how to

report deductible interest on your tax return.

Generally, home mortgage interest is any interest you

pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your

home, or a second mortgage.

You can’t deduct home mortgage interest unless the

following conditions are met.

• You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040).

• The mortgage is a secured debt on a qualified home

in which you have an ownership interest. Secured

Debt and Qualified Home are explained later.

Both you and the lender must intend that the loan be repaid.

Note: Interest on home equity loans and lines of credit

are deductible only if the borrowed funds are used to buy,

2

build, or substantially improve the taxpayer’s home that

secures the loan. The loan must be secured by the taxpayer’s main home or second home (qualified residence),

and meet other requirements.

Fully deductible interest. In most cases, you can deduct all of your home mortgage interest. How much you

can deduct depends on the date of the mortgage, the

amount of the mortgage, and how you use the mortgage

proceeds.

If all of your mortgages fit into one or more of the following three categories at all times during the year, you can

deduct all of the interest on those mortgages. (If any one

mortgage fits into more than one category, add the debt

that fits in each category to your other debt in the same

category.) If one or more of your mortgages doesn’t fit into

any of these categories, use Part II of this publication to

figure the amount of interest you can deduct.

The three categories are as follows.

1. Mortgages you took out on or before October 13,

1987 (called grandfathered debt).

2. Mortgages you (or your spouse if married filing a joint

return) took out after October 13, 1987, and prior to

December 16, 2017 (see binding contract exception

below), to buy, build, or substantially improve your

home (called home acquisition debt), but only if

throughout 2025 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less

if married filing separately).

Exception. A taxpayer who enters into a written

binding contract before December 15, 2017, to close

on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, is considered to have incurred the

home acquisition debt prior to December 16, 2017.

3. Mortgages you (or your spouse if married filing a joint

return) took out after December 15, 2017, to buy,

build, or substantially improve your home (called

home acquisition debt), but only if throughout 2025

these mortgages plus any grandfathered debt totaled

$750,000 or less ($375,000 or less if married filing

separately).

The dollar limits for the second and third categories apply

to the combined mortgages on your main home and second home.

See Part II for more detailed definitions of grandfathered debt and home acquisition debt.

You can use Figure A to check whether your home

mortgage interest is fully deductible.

Publication 936 (2025)

Figure A. Is My Home Mortgage Interest Fully Deductible?

(Instructions: Include balances of ALL mortgages secured by your main home and second home.)

Start Here:

Do you meet the conditions1 to deduct home

mortgage interest?

No

You can’t deduct the interest payments as home

mortgage interest. 2

Yes

Were all of your home mortgages taken out

on or before October 13, 1987?

Yes

Your home mortgage interest is fully deductible. You

don’t need to read Part II of this publication.

No

Were all of your home mortgages taken out after

October 13, 1987, used to buy, build, or substantially

improve the main home secured by that main home

mortgage or used to buy, build, or substantially

improve the second home secured by that second

home mortgage, or both?

No

Go to Part II of this publication to determine the

limits on your deductible home mortgage interest.

Yes

Were your (or your spouse’s if married filing a joint

return) mortgage balances $750,000 or less

($375,000 or less if married filing separately)

(or $1 million or less ($500,000 if married filing

separately) if all debt was incurred prior to

December 16, 2017) at all times during the year? 3

No

Yes

Were your (or your spouse’s if married filing a joint

return) grandfathered debt plus home acquisition

debt balances $750,000 or less4 ($375,000 or less if

married filing separately) (or $1 million or less

($500,000 if married filing separately) if all debt was

incurred prior to December 16, 2017) at all times

during the year? 3

No

Yes

1 You must itemize deductions on Schedule A (Form 1040). The loan must be a secured debt on a qualified home. See Part I, Home Mortgage Interest, earlier.

2 See Table 2 in Part II of this publication for where to deduct other types of interest payments.

3 A taxpayer who enters into a written binding contract before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018,

and who purchases such residence before April 1, 2018, is considered to have incurred the home acquisition debt prior to December 16, 2017, and may use

the 2017 threshold amounts of $1,000,000 ($500,000 for married filing separately).

4

See Part II of this publication for more information about grandfathered debt and home acquisition debt.

Secured Debt

• Provides, in case of default, that your home could sat-

You can deduct your home mortgage interest only if your

mortgage is a secured debt. A secured debt is one in

which you sign an instrument (such as a mortgage, deed

of trust, or land contract) that:

• Is recorded or is otherwise perfected under any state

isfy the debt; and

or local law that applies.

payment of the debt;

In other words, your mortgage is a secured debt if you

put your home up as collateral to protect the interests of

the lender. If you can't pay the debt, your home can then

serve as payment to the lender to satisfy (pay) the debt. In

this publication, mortgage will refer to secured debt.

Publication 936 (2025)

3

• Makes your ownership in a qualified home security for

Debt not secured by home. A debt isn’t secured by

your home if it is secured solely because of a lien on your

general assets or if it is a security interest that attaches to

the property without your consent (such as a mechanic's

lien or judgment lien).

A debt isn’t secured by your home if it once was, but is

no longer, secured by your home.

Wraparound mortgage. This isn’t a secured debt unless it is recorded or otherwise perfected under state law.

Example. Ari owns a home subject to a mortgage of

$40,000. Ari sells the home for $100,000 to Palmer, who

takes it subject to the $40,000 mortgage. Ari continues to

make the payments on the $40,000 note. Palmer pays

$10,000 down and gives Ari a $90,000 note secured by a

wraparound mortgage on the home. Ari doesn't record or

otherwise perfect the $90,000 mortgage under the state

law that applies. Therefore, the mortgage isn't a secured

debt and Palmer can't deduct any of the interest paid on it

as home mortgage interest.

Choice to treat the debt as not secured by your

home. You can choose to treat any debt secured by your

qualified home as not secured by the home. This treatment begins with the tax year for which you make the

choice and continues for all later tax years. You can revoke your choice only with the consent of the IRS.

You may want to treat a debt as not secured by your

home if the interest on that debt is fully deductible (for example, as a business expense) whether or not it qualifies

as home mortgage interest. This may allow you, if the limits in Part II apply, more of a deduction for interest on other

debts that are deductible only as home mortgage interest.

Cooperative apartment owner. If you own stock in a cooperative housing corporation, see the Special Rule for

Tenant-Stockholders in Cooperative Housing Corporations near the end of this Part I.

Qualified Home

any time during the year, you can treat it as a qualified

home. You don't have to use the home during the year.

Second home rented out. If you have a second

home and rent it out part of the year, you must also use it

as a home during the year for it to be a qualified home.

You must use this home more than 14 days or more than

10% of the number of days during the year that the home

is rented at a fair rental, whichever is longer. If you don't

use the home long enough, it is considered rental property

and not a second home. For information on residential

rental property, see Pub. 527.

More than one second home. If you have more than

one second home, you can treat only one as the qualified

second home during any year. However, you can change

the home you treat as a second home during the year in

the following situations.

• If you get a new home during the year, you can choose

to treat the new home as your second home as of the

day you buy it.

• If your main home no longer qualifies as your main

home, you can choose to treat it as your second home

as of the day you stop using it as your main home.

• If your second home is sold during the year or be-

comes your main home, you can choose a new second home as of the day you sell the old one or begin

using it as your main home.

Divided use of your home. The only part of your home

that is considered a qualified home is the part you use for

residential living. If you use part of your home for other

than residential living, such as a home office, you must allocate the use of your home. You must then divide both

the cost and fair market value of your home between the

part that is a qualified home and the part that isn't. Dividing the cost may affect the amount of your home acquisition debt, which is limited to the cost of your home plus the

cost of any improvements. (See Home Acquisition Debt in

Part II, later.)

For you to take a home mortgage interest deduction, your

debt must be secured by a qualified home. This means

your main home or your second home. A home includes a

house, condominium, cooperative, mobile home, house

trailer, boat, or similar property that has sleeping, cooking,

and toilet facilities.

Renting out part of home. If you rent out part of a

qualified home to another person (tenant), you can treat

the rented part as being used by you for residential living

only if all of the following conditions apply.

The interest you pay on a mortgage on a home other

than your main or second home may be deductible if the

proceeds of the loan were used for business, investment,

or other deductible purposes. Otherwise, it is considered

personal interest and isn't deductible.

• The rented part of your home isn't a self-contained

Main home. You can have only one main home at any

one time. This is the home where you ordinarily live most

of the time.

Second home. A second home is a home that you

choose to treat as your second home.

Second home not rented out. If you have a second

home that you don’t hold out for rent or resale to others at

4

• The rented part of your home is used by the tenant primarily for residential living.

residential unit having separate sleeping, cooking, and

toilet facilities.

• You don't rent (directly or by sublease) the same or different parts of your home to more than two tenants at

any time during the tax year. If two persons (and dependents of either) share the same sleeping quarters,

they are treated as one tenant.

Office in home. If you have an office in your home that

you use in your business, see Pub. 587, Business Use of

Your Home. It explains how to figure your deduction for the

business use of your home, which includes the business

part of your home mortgage interest.

Publication 936 (2025)

Home under construction. You can treat a home under

construction as a qualified home for a period of up to 24

months, but only if it becomes your qualified home at the

time it is ready for occupancy.

The 24-month period can start any time on or after the

day construction begins.

Home destroyed. You may be able to continue treating

your home as a qualified home even after it is destroyed in

a fire, storm, tornado, earthquake, or other casualty. This

means you can continue to deduct the interest you pay on

your home mortgage, subject to the limits described in this

publication.

You can continue treating a destroyed home as a qualified home if, within a reasonable period of time after the

home is destroyed, you:

• Rebuild the destroyed home and move into it, or

• Sell the land on which the home was located.

This rule applies to your main home and to a second

home that you treat as a qualified home.

Time-sharing arrangements. You can treat a home you

own under a time-sharing plan as a qualified home if it

meets all the requirements. A time-sharing plan is an arrangement between two or more people that limits each

person's interest in the home or right to use it to a certain

part of the year.

Rental of time-share. If you rent out your time-share,

it qualifies as a second home only if you also use it as a

home during the year. See Second home rented out, earlier, for the use requirement. To know whether you meet

that requirement, count your days of use and rental of the

home only during the time you have a right to use it or to

receive any benefits from the rental of it.

Married taxpayers. If you're married and file a joint return, your qualified home(s) can be owned either jointly or

by only one spouse.

Separate returns. If you're married filing separately

and you and your spouse own more than one home, you

can each take into account only one home as a qualified

home. However, if you both consent in writing, then one

spouse can take both the main home and a second home

into account.

Special Situations

This section describes certain items that can be included

as home mortgage interest and others that can't. It also

describes certain special situations that may affect your

deduction.

Late payment charge on mortgage payment. You can

deduct as home mortgage interest a late payment charge

if it wasn't for a specific service performed in connection

with your mortgage loan.

Mortgage prepayment penalty. If you pay off your home

mortgage early, you may have to pay a penalty. You can

deduct that penalty as home mortgage interest provided

Publication 936 (2025)

the penalty isn't for a specific service performed or cost incurred in connection with your mortgage loan.

Sale of home. If you sell your home, you can deduct your

home mortgage interest (subject to any limits that apply)

paid up to, but not including, the date of the sale.

Example. Sasha and Harper Smith sold their home on

May 7. Through April 30, they made home mortgage interest payments of $1,220. The settlement sheet for the sale

of the home showed $50 interest for the 6-day period in

May up to, but not including, the date of sale. Their mortgage interest deduction is $1,270 ($1,220 + $50).

Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must

spread this interest over the tax years to which it applies.

You can deduct in each year only the interest that qualifies

as home mortgage interest for that year. However, there is

an exception that applies to points, discussed later.

Mortgage interest credit. You may be able to claim a

mortgage interest credit if you were issued a mortgage

credit certificate (MCC) by a state or local government.

Figure the credit on Form 8396, Mortgage Interest Credit.

If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit.

See Form 8396 and Pub. 530 for more information on

the mortgage interest credit.

Ministers' and military housing allowance. If you're a

minister or a member of the uniformed services and receive a housing allowance that isn't taxable, you can still

deduct your home mortgage interest. For more information, see Pub. 3 (military) or Pub. 517 (ministers).

Mortgage assistance payments under section 235 of

the National Housing Act. If you qualify for mortgage

assistance payments for lower-income families under section 235 of the National Housing Act, part or all of the interest on your mortgage may be paid for you. You can't deduct the interest that is paid for you.

No other effect on taxes. Don’t include these mortgage assistance payments in your income. Also, don't use

these payments to reduce other deductions, such as real

estate taxes.

Homeowner Assistance Fund. The Homeowner Assistance Fund program (HAF) was established to provide financial assistance to eligible homeowners for purposes of

paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and

also displacements of homeowners experiencing financial

hardship after January 21, 2020. If you are a homeowner

who received assistance under the HAF, the payments

from the HAF program are not considered income to you

and you cannot take a deduction or credit for expenditures

paid from the HAF program.

See sections on State and Local Real Estate Taxes and

Home Mortgage Interest, in Pub. 530, to determine

whether you meet the rules to deduct all of the mortgage

5

interest on your loan and all of the real estate taxes on

your main home. For more details about the HAF program,

see Homeowner Assistance Fund in Pub. 530. If you received HAF funds from an Indian Tribal Government or an

Alaska Native Corporation and wish more details about

the HAF program, see FAQs for Payments by Indian Tribal

Governments and Alaska Native Corporations to

Individuals Under COVID-Relief Legislation.

Divorced or separated individuals. If a qualified

pre-2019 divorce or separation agreement requires you to

pay home mortgage interest on a home owned by your

spouse or former spouse or by both of you, the payment of

interest may be alimony. See the discussion of Payments

for jointly owned home under Alimony in Pub. 504, Divorced or Separated Individuals.

Redeemable ground rents. In some states (such as

Maryland), you can buy your home subject to a ground

rent. A ground rent is an obligation you assume to pay a

fixed amount per year on the property. Under this arrangement, you're leasing (rather than buying) the land on

which your home is located.

If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage

interest.

A ground rent is a redeemable ground rent if all of the

following are true.

• Your lease, including renewal periods, is for more than

15 years.

• You can freely assign the lease.

• You have a present or future right (under state or local

law) to end the lease and buy the lessor's entire interest in the land by paying a specific amount.

• The lessor's interest in the land is primarily a security

interest to protect the rental payments to which they’re

entitled.

Payments made to end the lease and to buy the lessor's entire interest in the land aren't deductible as mortgage interest.

Nonredeemable ground rents. Payments on a nonredeemable ground rent aren't mortgage interest. You can

deduct them as rent if they are a business expense or if

they are for rental property.

Rental payments. If you live in a house before final settlement on the purchase, any payments you make for that

period are rent and not interest. This is true even if the settlement papers call them interest. You can't deduct these

payments as home mortgage interest.

Mortgage proceeds invested in tax-exempt securities. You can't deduct the home mortgage interest on

grandfathered debt if you used the proceeds of the mortgage to buy securities or certificates that produce tax-free

income. “Grandfathered debt” is defined in Part II of this

publication.

Refunds of interest. If you receive a refund of interest in

the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. If you receive

a refund of interest you deducted in an earlier year, you

must generally include the refund in income in the year

you receive it. However, you need to include it only up to

the amount of the deduction that reduced your tax in the

earlier year. This is true whether the interest overcharge

was refunded to you or was used to reduce the outstanding principal on your mortgage. If you need to include the

refund in income, report it on Schedule 1 (Form 1040),

line 8z.

If you received a refund of interest you overpaid in an

earlier year, you will generally receive a Form 1098, Mortgage Interest Statement, showing the refund in box 4. For

information about Form 1098, see Form 1098, Mortgage

Interest Statement, below.

For more information on how to treat refunds of interest

deducted in earlier years, see Recoveries in Pub. 525,

Taxable and Nontaxable Income.

SBA disaster home loans. Interest paid on disaster

home loans from the Small Business Administration (SBA)

is deductible as mortgage interest if the requirements discussed earlier under Home Mortgage Interest are met.

Points

The term “points” is used to describe certain charges paid,

or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees,

Reverse mortgages. A reverse mortgage is a loan

where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while

you continue to live in your home. With a reverse mortgage, you retain title to your home. Depending on the

plan, your reverse mortgage becomes due, with interest,

when you move, sell your home, reach the end of a

pre-selected loan period, or die. Because reverse mortgages are considered loan advances and not income, the

amount you receive isn't taxable. Generally, any interest

(including original issue discount) accrued on a reverse

mortgage is considered interest on home equity debt and

isn’t deductible.

6

Publication 936 (2025)

maximum loan charges, loan discount, or discount points.

Figure B. Are My Points Fully Deductible This Year?

Start Here:

Is the loan secured by your main home?

No

Yes

Is the payment of points an established

business practice in your area?

No

Yes

Were the points paid more than the

amount generally charged in your area?

Yes

No

Do you use the cash method of

accounting?

No

Yes

Were the points paid in place of

amounts that ordinarily are separately

stated on the settlement sheet?

Yes

No

Were the funds you provided (other than

those you borrowed from your lender or

mortgage broker), plus any points the

seller paid, at least as much as the points

charged?*

No

Yes

Yes

Did you take out the loan to substantially

improve your main home?

No

Did you take out the loan to buy or build

your main home?

No

Yes

Were the points figured as a percentage

of the principal amount of the mortgage?

No

Yes

Is the amount paid clearly shown as

points on the settlement statement?

No

Yes

You can fully deduct the points this year

on Schedule A (Form 1040).

You cannot fully deduct the points this

year. See the discussion on Points,

earlier.

* The funds you provided are not required to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other

funds you paid at or before closing for any purpose.

Publication 936 (2025)

7

A borrower is treated as paying any points that a home

seller pays for the borrower's mortgage. See Points paid

by the seller, later.

General Rule

You generally can't deduct the full amount of points in the

year paid. Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. See Deduction Allowed Ratably next. If the loan is a

home equity, line of credit, or credit card loan and the proceeds from the loan are not used to buy, build, or substantially improve the home, the points are not deductible.

For exceptions to the general rule, see Deduction Allowed in Year Paid, later.

Deduction Allowed Ratably

If you don't meet the tests listed under Deduction Allowed

in Year Paid, later, the loan isn't a home improvement loan,

or you choose not to deduct your points in full in the year

paid, you can deduct the points ratably (equally) over the

life of the loan if you meet all of the following tests.

1. You use the cash method of accounting. This means

you report income in the year you receive it and deduct expenses in the year you pay them. Most individuals use this method.

2. Your loan is secured by a home. (The home doesn't

need to be your main home.)

3. Your loan period isn't more than 30 years.

2. Paying points is an established business practice in

the area where the loan was made.

3. The points paid weren't more than the points generally charged in that area.

4. You use the cash method of accounting. This means

you report income in the year you receive it and deduct expenses in the year you pay them. Most individuals use this method.

5. The points weren't paid in place of amounts that are

ordinarily stated separately on the settlement statement, such as appraisal fees, inspection fees, title

fees, attorney fees, and property taxes.

6. The funds you provided at or before closing, plus any

points the seller paid, were at least as much as the

points charged. The funds you provided aren't required to have been applied to the points. They can

include a down payment, an escrow deposit, earnest

money, and other funds you paid at or before closing

for any purpose. You can't have borrowed these funds

from your lender or mortgage broker.

7. You use your loan to buy or build your main home.

8. The points were figured as a percentage of the principal amount of the mortgage.

9. The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form

HUD-1) as points charged for the mortgage. The

points may be shown as paid from either your funds or

the seller's.

4. If your loan period is more than 10 years, the terms of

your loan are the same as other loans offered in your

area for the same or longer period.

Note: If you meet all of these tests, you can choose to

either fully deduct the points in the year paid, or deduct

them over the life of the loan.

5. Either the initial principal amount of your loan was

$250,000 or less, or the number of points isn't more

than:

Home improvement loan. You can also fully deduct in

the year paid points paid on a loan to substantially improve your main home if tests 1 through 6 are met.

a. 4, if your loan period is 15 years or less; or

Caution: Second home. You can't fully deduct in the

year paid points you pay on loans secured by your second

home. You can deduct these points only over the life of the

loan.

b. 6, if your loan period is more than 15 years.

Example. You use the cash method of accounting. In

2025, you took out a $100,000 home mortgage loan payable over 20 years. The terms of the loan are the same as

for other 20-year loans offered in your area. You paid

$4,800 in points. You made 3 monthly payments on the

loan in 2025. You can deduct $60 [($4,800 ÷ 240 months)

x 3 payments] in 2025. In 2026, if you make all twelve payments, you will be able to deduct $240 ($20 x 12).

Deduction Allowed in Year Paid

You can fully deduct points in the year paid if you meet all

the following tests. (You can use Figure B as a quick guide

to see whether your points are fully deductible in the year

paid.)

1. Your loan is secured by your main home. (Your main

home is the one you ordinarily live in most of the

time.)

8

Refinancing. Generally, points you pay to refinance a

mortgage aren't deductible in full in the year you pay them.

This is true even if the new mortgage is secured by your

main home.

However, if you use part of the refinanced mortgage

proceeds to substantially improve your main home and

you meet the first six tests listed under Deduction Allowed

in Year Paid, earlier, you can fully deduct the part of the

points related to the improvement in the year you paid

them with your own funds. You can deduct the rest of the

points over the life of the loan.

Example 1. In 2005, you got a mortgage to buy a

home. In 2025, you refinanced that mortgage with a

15-year $100,000 mortgage loan. The mortgage is secured by your home. To get the new loan, you had to pay

three points ($3,000). Two points ($2,000) were for

Publication 936 (2025)

prepaid interest, and one point ($1,000) was charged for

services, in place of amounts that are ordinarily stated

separately on the settlement statement. You paid the

points out of your private funds, rather than out of the proceeds of the new loan. The payment of points is an established practice in the area, and the points charged aren't

more than the amount generally charged there. Your first

payment on the new loan was due July 1. You made six

payments on the loan in 2025 and are a cash basis taxpayer.

You used the funds from the new mortgage to repay

your existing mortgage. Although the new mortgage loan

was for your continued ownership of your main home, it

wasn't for the purchase or substantial improvement of that

home. You can't deduct all of the points in 2025. You can

deduct two points ($2,000) ratably over the life of the loan.

You deduct $67 [($2,000 ÷ 180 months) × 6 payments] of

the points in 2025. The other point ($1,000) was a fee for

services and isn't deductible.

Example 2. The facts are the same as in Example 1,

except that you used $25,000 of the loan proceeds to substantially improve your home and $75,000 to repay your

existing mortgage. You deduct 25% ($25,000 ÷ $100,000)

of the points ($2,000) in 2025. Your deduction is $500

($2,000 × 25% (0.25)).

You also deduct the ratable part of the remaining

$1,500 ($2,000 − $500) that must be spread over the life

of the loan. This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2025. The total amount you deduct in 2025 is

$550 ($500 + $50).

Special Situations

This section describes certain special situations that may

affect your deduction of points.

Original issue discount. If you don't qualify to either deduct the points in the year paid or deduct them ratably

over the life of the loan, or if you choose not to use either

of these methods, the points reduce the issue price of the

loan. This reduction results in original issue discount.

Amounts charged for services. Amounts charged by

the lender for specific services connected to the loan

aren't interest. Examples of these charges are:

• Appraisal fees,

• Department of Veterans Affairs (VA) funding fees,

• Mortgage insurance premiums,

• Notary fees, and

• Preparation costs for the mortgage note or deed of

trust.

You can't deduct these amounts as points either in the

year paid or over the life of the mortgage.

Points paid by the seller. The term “points” includes

loan placement fees that the seller pays to the lender to

arrange financing for the buyer.

Publication 936 (2025)

Treatment by seller. The seller can't deduct these

fees as interest. But they are a selling expense that reduces the amount realized by the seller. See Pub. 523 for

information on selling your home.

Treatment by buyer. The buyer reduces the basis of

the home by the amount of the seller-paid points and

treats the points as if the buyer had paid them. If all the

tests under Deduction Allowed in Year Paid, earlier, are

met, the buyer can deduct the points in the year paid. If

any of those tests aren't met, the buyer deducts the points

over the life of the loan.

If you need information about the basis of your home,

see Pub. 523 or Pub. 530.

Funds provided are less than points. If you meet all

the tests in Deduction Allowed in Year Paid, earlier, except

that the funds you provided were less than the points

charged to you (test 6, earlier), you can deduct the points

in the year paid, up to the amount of funds you provided.

In addition, you can deduct any points paid by the seller.

Example 1. When you took out a $100,000 mortgage

loan to buy your home in December, you were charged

one point ($1,000). You meet all the tests for deducting

points in the year paid, except the only funds you provided

were a $750 down payment. Of the $1,000 charged for

points, you can deduct $750 in the year paid. You spread

the remaining $250 over the life of the mortgage.

Example 2. The facts are the same as in Example 1,

except that the person who sold you your home also paid

one point ($1,000) to help you get your mortgage. In the

year paid, you can deduct $1,750 ($750 of the amount you

were charged plus the $1,000 paid by the seller). You

spread the remaining $250 over the life of the mortgage.

You must reduce the basis of your home by the $1,000

paid by the seller.

Excess points. If you meet all the tests in Deduction Allowed in Year Paid, earlier, except that the points paid

were more than generally paid in your area (test 3), you

deduct in the year paid only the points that are generally

charged. You must spread any additional points over the

life of the mortgage.

Mortgage ending early. If you spread your deduction for

points over the life of the mortgage, you can deduct any

remaining balance in the year the mortgage ends. However, if you refinance the mortgage with the same lender,

you can't deduct any remaining balance of spread points.

Instead, deduct the remaining balance over the term of the

new loan.

A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event.

Example. You paid $3,000 in points in 2014 that you

had to spread out over the 15-year life of the mortgage.

You deduct $200 points per year. Through 2024, you have

deducted $2,200 of the points.

You prepaid your mortgage in full in 2025. You can deduct the remaining $800 of points in 2025.

9

Limits on deduction. You can't fully deduct points paid

on a mortgage that exceeds the limits discussed in Part II.

See the Table 1 Instructions, later, for line 13.

Form 1098. The mortgage interest statement you receive

should show not only the total interest paid during the

year, but also your mortgage insurance premiums and deductible points paid during the year. See Form 1098, Mortgage Interest Statement, later.

Form 1098, Mortgage Interest

Statement

If you paid $600 or more of mortgage interest (including

certain points) during the year on any one mortgage, you

will generally receive a Form 1098 or a similar statement

from the mortgage holder. You will receive the statement if

you pay interest to a person (including a financial institution or cooperative housing corporation) in the course of

that person's trade or business. A governmental unit is a

person for purposes of furnishing the statement.

The statement for each year should be sent to you by

January 31 of the following year. A copy of this form will

also be sent to the IRS.

The statement will show the total interest you paid during the year, any mortgage insurance premiums you paid,

and if you purchased a principal residence during the

year, it will also show the points paid during the year, including seller-paid points, that are deductible as interest to

the extent you do not exceed the home acquisition debt

limit. See Part II. Limits on Home Mortgage Interest Deduction, later. However, the statement shouldn't show any

interest that was paid for you by a government agency.

As a general rule, Form 1098 will include only points

that you can fully deduct in the year paid. However, it may

report points that you can't deduct, particularly if you are

filing married filing separately or have mortgages for multiple properties. You must take care to deduct only those

points legally allowable. Additionally, certain points not included on Form 1098 may also be deductible, either in the

year paid or over the life of the loan. See the earlier discussion of Points to determine whether you can deduct

points not shown on Form 1098.

Prepaid interest on Form 1098. If you prepaid interest

in 2025 that accrued in full by January 15, 2026, this prepaid interest may be included in box 1 of Form 1098. However, you can't deduct the prepaid amount for January

2026 in 2025. (See Prepaid interest, earlier.) You will have

to figure the interest that accrued for 2026 and subtract it

from the amount in box 1. You will include the interest for

January 2026 with other interest you pay for 2026.

Refunded interest. If you received a refund of mortgage

interest you overpaid in an earlier year, you will generally

receive a Form 1098 showing the refund in box 4. See Refunds of interest, earlier.

10

How To Report

Generally, you can deduct the home mortgage interest

and points reported to you on Form 1098 on Schedule A

(Form 1040), line 8a. However, any interest showing in

box 1 of Form 1098 from a home equity loan, or a line of

credit or credit card loan secured by the property, is not

deductible if the proceeds were not used to buy, build, or

substantially improve a qualified home. If you paid more

deductible interest to the financial institution than the

amount shown on Form 1098, show the portion of the deductible interest that was omitted from Form 1098 on

line 8b. Attach a statement to your paper return explaining

the difference and print “See attached” next to line 8b.

Deduct home mortgage interest that wasn't reported to

you on Form 1098 on Schedule A (Form 1040), line 8b. If

you paid home mortgage interest to the person from

whom you bought your home, show that person's name,

address, and taxpayer identification number (TIN) on the

dotted lines next to line 8b. The seller must give you this

number and you must give the seller your TIN. A Form

W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Failure to meet any

of these requirements may result in a $50 penalty for each

failure. The TIN can be either a social security number, an

individual taxpayer identification number (issued by the

IRS), or an employer identification number (EIN).

If you can take a deduction for points that weren’t reported to you on Form 1098, deduct those points on Schedule A (Form 1040), line 8c.

More than one borrower. If you and at least one other

person (other than your spouse if you file a joint return)

were liable for and paid interest on a mortgage that was

for your home, and the other person received a Form 1098

showing the interest that was paid during the year, attach

a statement to your paper return explaining this. Show

how much of the interest each of you paid, and give the

name and address of the person who received the form.

Deduct your share of the interest on Schedule A (Form

1040), line 8b, and print “See attached” next to the line.

Similarly, if you're the payer of record on a mortgage on

which there are other borrowers entitled to a deduction for

the interest shown on the Form 1098 you received, deduct

only your share of the interest on Schedule A (Form

1040), line 8a. Let each of the other borrowers know what

their share is.

Mortgage proceeds used for business or investment.

If your home mortgage interest deduction is limited under

the rules explained in Part II, but all or part of the mortgage

proceeds were used for business, investment, or other deductible activities, see Table 2 near the end of this publication. It shows where to deduct the part of your excess interest that is for those activities. The Table 1 Instructions

for line 16 in Part II explain how to divide the excess interest among the activities for which the mortgage proceeds

were used.

Publication 936 (2025)

Special Rule for Tenant-Stockholders

in Cooperative Housing Corporations

A qualified home includes stock in a cooperative housing

corporation owned by a tenant-stockholder. This applies

only if the tenant-stockholder is entitled to live in the house

or apartment because of owning stock in the cooperative.

Cooperative housing corporation. This is a corporation that meets all of the following conditions.

1. Has only one class of stock outstanding.

2. Has no stockholders other than those that own the

stock who can live in a house, apartment, or house

trailer owned or leased by the corporation.

3. Has no stockholders who can receive any distribution

out of capital other than on a liquidation of the corporation.

4. Meets at least one of the following requirements.

a. Receives at least 80% of its gross income for the

year in which the mortgage interest is paid or incurred from tenant-stockholders. For this purpose,

gross income is all income received during the entire year, including amounts received before the

corporation changed to cooperative ownership.

b. At all times during the year, at least 80% of the total square footage of the corporation's property is

used or available for use by the tenant-stockholders for residential or residential-related use.

c. At least 90% of the corporation's expenditures

paid or incurred during the year are for the acquisition, construction, management, maintenance, or

care of corporate property for the benefit of the

tenant-stockholders.

Stock used to secure debt. In some cases, you can't

use your cooperative housing stock to secure a debt because of either:

• Restrictions under local or state law, or

• Restrictions in the cooperative agreement (other than

restrictions in which the main purpose is to permit the

tenantstockholder to treat unsecured debt as secured debt).

However, you can treat a debt as secured by the stock to

the extent that the proceeds are used to buy the stock under the allocation of interest rules.

Figuring deductible home mortgage interest. Generally, if you're a tenant-stockholder, you can deduct payments you make for your share of the interest paid or incurred by the cooperative. The interest must be on a debt

to buy, build, change, improve, or maintain the cooperative's housing, or on a debt to buy the land.

Figure your share of this interest by multiplying the total

by the following fraction.

Your shares of stock in the cooperative

The total shares of stock in the

cooperative

Publication 936 (2025)

Cooperative apartment owner. If you own a cooperative apartment, you must reduce your home mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. The

patronage dividend is a partial refund to the cooperative

housing corporation of mortgage interest if paid in a prior

year.

If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount

you can deduct.

Limits on deduction. To figure how the limits discussed in Part II apply to you, treat your share of the cooperative's debt as debt incurred by you. The cooperative

should determine your share of its grandfathered debt,

and its home acquisition debt. (Your share of each of

these types of debt is equal to the average balance of

each debt multiplied by the fraction just given.) After your

share of the average balance of each type of debt is determined, you include it with the average balance of that type

of debt secured by your stock.

Form 1098. The cooperative should give you a Form

1098 showing your share of the interest. Use the rules in

this publication to determine your deductible mortgage interest.

Part II. Limits on Home

Mortgage Interest Deduction

This part of the publication discusses the limits on deductible home mortgage interest. These limits apply to your

home mortgage interest expense if you have a home mortgage that doesn't fit into any of the three categories listed

at the beginning of Part I under Fully deductible interest,

earlier.

Your home mortgage interest deduction is limited to the

interest on the part of your home mortgage debt that isn't

more than your qualified loan limit. This is the part of your

home mortgage debt that is grandfathered debt or that

isn't more than the limits for home acquisition debt. Table 1 can help you figure your qualified loan limit and your

deductible home mortgage interest.

Home Acquisition Debt

Home acquisition debt is a mortgage you took out after

October 13, 1987, to buy, build, or substantially improve a

qualified home (your main or second home). It must also

be secured by that home.

If the amount of your mortgage is more than the cost of

the home plus the cost of any substantial improvements,

only the debt that isn't more than the cost of the home plus

substantial improvements qualifies as home acquisition

debt.

Home acquisition debt limit. The total amount you (or

your spouse if married filing a joint return) can treat as

11

home acquisition debt on your main home and second

home is limited based on when the debt is secured.

• For debt secured after October 13, 1987, and prior to

December 16, 2017, the limit is $1 million ($500,000 if

married filing separately).

• For debt secured after December 15, 2017, the limit is

$750,000 ($375,000 if married filing separately). However, a taxpayer who entered into a written binding

contract before December 15, 2017, to close on the

purchase of a principal residence before January 1,

2018, and who purchased such residence before April

1, 2018, is considered to have incurred the home acquisition debt prior to December 16, 2017.

The limits above are reduced (but not below zero) by the

amount of your grandfathered debt (discussed later).

Refinanced home acquisition debt. Any secured debt

you use to refinance home acquisition debt is treated as

home acquisition debt. However, the new debt will qualify

as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt.

Mortgage that qualifies later. A mortgage that doesn't

qualify as home acquisition debt because it doesn't meet

all the requirements may qualify at a later time. For example, a debt that you use to buy your home may not qualify

as home acquisition debt because it isn't secured by the

home. However, if the debt is later secured by the home, it

may qualify as home acquisition debt after that time. Similarly, a debt that you use to buy property may not qualify

because the property isn't a qualified home. However, if

the property later becomes a qualified home, the debt may

qualify after that time.

Mortgage treated as used to buy, build, or substantially improve home. A mortgage secured by a qualified

home may be treated as home acquisition debt, even if

you don't actually use the proceeds to buy, build, or substantially improve the home. This applies in the following

situations.

1. You buy your home within 90 days before or after the

date you take out the mortgage. The home acquisition

debt is limited to the home's cost, plus the cost of any

substantial improvements within the limit described

below in (2) or (3). (See Example 1, later.)

2. You build or substantially improve your home and take

out the mortgage before the work is completed. The

home acquisition debt is limited to the amount of the

expenses incurred within 24 months before the date

of the mortgage.

3. You build or substantially improve your home and take

out the mortgage within 90 days after the work is completed. The home acquisition debt is limited to the

amount of the expenses incurred within the period beginning 24 months before the work is completed and

ending on the date of the mortgage. (See Example 2,

later.)

12

Example 1. You bought your main home on June 3 for

$175,000. You paid for the home with cash you got from

the sale of your old home. On July 15, you took out a mortgage of $150,000 secured by your main home. You used

the $150,000 to invest in stocks. You can treat the mortgage as taken out to buy your home because you bought

the home within 90 days before you took out the mortgage. The entire mortgage qualifies as home acquisition

debt because it wasn't more than the home's cost.

Example 2. On January 31, Logan began building a

home on the lot that Logan owned. Logan used $45,000

of personal funds to build the home. The home was completed on October 31. On November 21, Logan took out a

$36,000 mortgage that was secured by the home. The

mortgage can be treated as used to build the home because it was taken out within 90 days after the home was

completed. The entire mortgage qualifies as home acquisition debt because it wasn't more than the expenses incurred within the period beginning 24 months before the

home was completed. This is illustrated by Figure C.

Figure C.

Logan

Starts

Building

Home

Home

Completed

($45,000 in

Personal

Funds Used)

$36,000

Mortgage

Taken Out

Jan. 31

Oct. 31

Nov. 21

9 Months

22 Days

(Within 24 Months) (Within 90 Days)

Date of the mortgage. 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. If a timely application

you make is rejected, a reasonable additional time will be

allowed to make a new application.

Cost of home or improvements. To determine your

cost, include amounts paid to acquire any interest in a

qualified home or to substantially improve the home.

The cost of building or substantially improving a qualified home includes the costs to acquire real property and

building materials, fees for architects and design plans,

and required building permits.

Substantial improvement. An improvement is substantial if it:

• Adds to the value of your home,

• Prolongs your home's useful life, or

• Adapts your home to new uses.

Repairs that maintain your home in good condition,

such as repainting your home, aren't substantial

Publication 936 (2025)

improvements. However, if you paint your home as part of

a renovation that substantially improves your qualified

home, you can include the painting costs in the cost of the

improvements.

Acquiring an interest in a home because of a divorce. If you incur debt to acquire the interest of a spouse

or former spouse in a home because of a divorce or legal

separation, you can treat that debt as home acquisition

debt.

Part of home not a qualified home. To figure your

home acquisition debt, you must divide the cost of your

home and improvements between the part of your home

that is a qualified home and any part that isn't a qualified

home. See Divided use of your home under Qualified

Home in Part I, earlier.

Grandfathered Debt

If you took out a mortgage on your home before October

14, 1987, or you refinanced such a mortgage, it may qualify as grandfathered debt. To qualify, it must have been secured by your qualified home on October 13, 1987, and at

all times after that date. How you used the proceeds

doesn't matter.

Grandfathered debt isn't limited. All of the interest you

paid on grandfathered debt is fully deductible home mortgage interest. However, the amount of your grandfathered

debt reduces the limit for home acquisition debt.

Refinanced grandfathered debt. If you refinanced

grandfathered debt after October 13, 1987, for an amount

that wasn't more than the mortgage principal left on the

debt, then you still treat it as grandfathered debt. To the

extent the new debt is more than that mortgage principal,

it is treated as home acquisition debt (so long as the proceeds were used to buy, build, or substantially improve the

home), and the mortgage is a mixed-use mortgage (dis-

Publication 936 (2025)

cussed later under Average Mortgage Balance in the Table 1 Instructions). The debt must be secured by the qualified home.

You treat grandfathered debt that was refinanced after

October 13, 1987, as grandfathered debt only for the term

left on the debt that was refinanced. After that, you treat it

as home acquisition debt to the extent that it was used to

buy, build, or substantially improve the home.

Exception. If the debt before refinancing was like a

balloon note (the principal on the debt wasn't amortized

over the term of the debt), then you treat the refinanced

debt as grandfathered debt for the term of the first refinancing. This term can't be more than 30 years.

Example. You took out a $200,000 first mortgage on

your home in 1986. The mortgage was a 10-year balloon

note and the entire balance on the note was due in 1996.

You refinanced the debt in 1996 with a new 30-year mortgage. The refinanced debt is treated as grandfathered

debt for its entire term (30 years).

Table 1 Instructions

You can deduct all of the interest you paid during the year

on mortgages secured by your main home or second

home in either of the following two situations.

• All the mortgages are grandfathered debt.

• The total of the mortgage balances for the entire year

is within the limits discussed earlier under Home Acquisition Debt.

In either of those cases, you don't need Table 1. Otherwise, you can use Table 1 to determine your qualified loan

limit and deductible home mortgage interest.

Tip: Fill out only one Table 1 for both your main and

second home regardless of how many mortgages you

have.

13

Table 1. Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage

Interest for the Current Year

See the Table 1 Instructions.

Part I

Qualified Loan Limit

1.

Enter the average balance of all your grandfathered debt. See the line 1

instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

Enter the average balance of all your home acquisition debt incurred after October

13, 1987, and prior to December 16, 2017. See the line 2 instructions . . . . . . . . . . . . . .

2.

3.

Enter $1,000,000 ($500,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4.

Enter the larger of the amount on line 1 or the amount on line 3 . . . . . . . . . . . . . . . . . . . .

4.

5.

Add the amounts on lines 1 and 2. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6.

Enter the smaller of the amount on line 4 or the amount on line 5 . . . . . . . . . . . . . . . . . .

6.

• If you have no home acquisition debt incurred after December 15, 2017, or the

amount on line 6 is $750,000 ($375,000 if married filing separately) or more,

line 6 is your qualified loan limit. Enter this amount on line 11 and go to Part II,

line 12.

If

• you have home acquisition debt incurred after December 15, 2017, go to line 7.

7.

Enter the average balance of all your home acquisition debt incurred after December

15, 2017. See the line 7 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8.

Enter $750,000 ($375,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9.

Enter the larger of the amount on line 6 or the amount on line 8 . . . . . . . . . . . . . . . . . . . .

9.

10. Add the amounts on lines 6 and 7. Enter the total here . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Enter the smaller of line 9 or line 10. This is your qualified loan limit . . . . . . . . . . . . .

11.

Part II

Deductible Home Mortgage Interest

12. Enter the total of the average balances of all mortgages from lines 1, 2, and 7 on all

qualified homes.

See the line 12 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

• If line 11 is less than line 12, go on to line 13.

• If line 11 is equal to or more than line 12, stop here. All of your interest on all the

mortgages included on line 12 is deductible as home mortgage interest on

Schedule A (Form 1040).

13. Enter the total amount of interest that you paid on the loans from line 12. See the

line 13 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14. Divide the amount on line 11 by the amount on line 12. Enter the result as a decimal

amount (rounded to three places) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Multiply the amount on line 13 by the decimal amount on line 14. Enter the result.

This is your deductible home mortgage interest. Enter this amount on

Schedule A (Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

16. Subtract the amount on line 15 from the amount on line 13. Enter the result. This

isn't home mortgage interest. See the line 16 instructions . . . . . . . . . . . . . . . . . . . . . .

16.

14

×.

Publication 936 (2025)

Average Mortgage Balance

You have to figure the average balance of each mortgage

to determine your qualified loan limit. You need these

amounts to complete lines 1, 2, 7, and 12 of Table 1. You

can use the highest mortgage balances during the year,

but you may benefit most by using the average balances.

The following are methods you can use to figure your

average mortgage balances. However, if a mortgage has

more than one category of debt, see Mixed-use mortgages, later, in this section.

Average of first and last balance method. You can use

this method if all the following apply.

• You didn't borrow any new amounts on the mortgage

during the year. (This doesn't include borrowing the

original mortgage amount.)

• You didn't prepay more than 1 month's principal during

the year. (This includes prepayment by refinancing

your home or by applying proceeds from its sale.)

• You had to make level payments at fixed equal inter-

vals on at least a semi-annual basis. You treat your

payments as level even if they were adjusted from time

to time because of changes in the interest rate.

To figure your average balance, complete the following

worksheet.

1.

Enter the balance as of the first day of the year

that the mortgage was secured by your qualified

home during the year (generally, January 1) . . . .

2.

Enter the balance as of the last day of the year

that the mortgage was secured by your qualified

home during the year (generally, December

31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

Add amounts on lines 1 and 2 . . . . . . . . . . . .

4.

Divide the amount on line 3 by 2.0. Enter

the result . . . . . . . . . . . . . . . . . . . . . . . . .

Interest paid divided by interest rate method. You can

use this method if at all times in 2025 the mortgage was

secured by your qualified home and the interest was paid

at least monthly.

Complete the following worksheet to figure your average balance.

1.

2.

3.

Enter the interest paid in 2025. Don’t include

points, mortgage insurance premiums, or any

interest paid in 2025 that is for a year after 2025.

However, do include interest that is for 2025 but

was paid in an earlier year . . . . . . . . . . . . . .

$2,500

Enter the annual interest rate on the mortgage. If

the interest rate varied in 2025, use the lowest

rate for the year . . . . . . . . . . . . . . . . . . . . .

0.09

Divide the amount on line 1 by the amount on

line 2. Enter the result . . . . . . . . . . . . . . . . .

$27,778

Statements provided by your lender. If you receive

monthly statements showing the closing balance or the

average balance for the month, you can use either to figure your average balance for the year. You can treat the

balance as zero for any month the mortgage wasn't secured by your qualified home.

For each mortgage, figure your average balance by

adding your monthly closing or average balances and dividing that total by the number of months the home secured by that mortgage was a qualified home during the

year.

If your lender can give you your average balance for the

year, you can use that amount.

Example. You had a home loan secured by your main

home all year. You received monthly statements showing

your average balance for each month. You can figure your

average balance for the year by adding your monthly average balances and dividing the total by 12.

Mixed-use mortgages. A mixed-use mortgage is a loan

that consists of more than one of the three categories of

debt (grandfathered debt, home acquisition debt, and

home equity debt). For example, a mortgage you took out

during the year is a mixed-use mortgage if you used its

proceeds partly to refinance a mortgage that you took out

in an earlier year to buy your home (home acquisition

debt) and partly to buy a car (home equity debt).

Complete lines 1, 2, and 7 of Table 1 by including the

separate average balances of any grandfathered debt and

home acquisition debt (determined by the date the debt

was acquired) in your mixed-use mortgage. Don’t use the

methods described earlier in this section to figure the

average balance of either category. Instead, for each category, use the following method.

1.

Enter the interest paid in 2025. Don't include points,

or any interest paid in 2025 that is for a year after

2025. However, do include interest that is for 2025

but was paid in an earlier year . . . . . . . . . . . . . .

2.

Enter the annual interest rate on the mortgage. If

the interest rate varied in 2025, use the lowest rate

for the year . . . . . . . . . . . . . . . . . . . . . . . . . .

1. Figure the balance of that category of debt for each

month. This is the amount of the loan proceeds allocated to that category, reduced by your principal payments on the mortgage previously applied to that category. Principal payments on a mixed-use mortgage

are applied in full to each category of debt, until its

balance is zero, in the following order.

3.

Divide the amount on line 1 by the amount on

line 2. Enter the result . . . . . . . . . . . . . . . . . . .

a. First, any home equity debt not used to buy, build,

or substantially improve the home.

Example. You had a mortgage secured by your main

home all year. You paid interest of $2,500 on this loan.

The interest rate on the loan was 9% (0.09) all year. Your

average balance using this method is $27,778, figured as

follows.

Publication 936 (2025)

b. Next, any grandfathered debt.

c. Finally, any home acquisition debt.

2. Add together the monthly balances figured for b and c

in (1).

15

Complete line 12 of Table 1 using the figure from line 2

above.

Example 1. In 1986, you took out a first mortgage of

$1,400,000. The mortgage was a 10-year balloon note

and the entire balance on the note was due in 1996. You

refinanced the debt in 1996 with a new 30-year mortgage

(grandfathered debt). On March 2, 2025, when the home

had a fair market value of $1,700,000 and you owed

$500,000 on the mortgage, you took out a second mortgage for $200,000. You used $180,000 of the proceeds to

make substantial improvements to your home (home acquisition debt) and the remaining $20,000 to buy a car

(home equity debt). Under the loan agreement, you must

make principal payments of $1,000 at the end of each

month. During 2025, your principal payments on the second mortgage totaled $10,000.

To complete Table 1, line 7, you must figure a separate

average balance for the part of your second mortgage that

is home acquisition debt. The January and February balances were zero. The March through December balances

were all $180,000 because none of your principal payments are applied to the home acquisition debt. (They are

all applied to the home equity debt, reducing it to $10,000

[$20,000 − $10,000].) The monthly balances of the home

acquisition debt total $1,800,000 ($180,000 × 10). Therefore, the average balance of the home acquisition debt for

2025 was $150,000 ($1,800,000 ÷ 12).

Example 2. The facts are the same as in Example 1.

In 2026, your January through October principal payments

on your second mortgage are applied to the home equity

debt, reducing it to zero. The balance of the home acquisition debt remains $180,000 for each of those months. Because your November and December principal payments

are applied to the home acquisition debt, the November

balance is $179,000 ($180,000 − $1,000) and the December balance is $178,000 ($180,000 − $2,000). The

monthly balances total $2,157,000 [($180,000 × 10) +

$179,000 + $178,000]. Therefore, the average balance of

the home acquisition debt for 2026 is $179,750

($2,157,000 ÷ 12).

Line 1

Figure the average balance for the current year of each

mortgage you had on all qualified homes on October 13,

1987 (grandfathered debt). Add the results together and

enter the total on line 1. Include the average balance for

the current year for any grandfathered debt that is part of a

mixed-use mortgage.

Line 2

Figure the average balance for the current year of each

mortgage you took out on all qualified homes after October 13, 1987, and prior to December 16, 2017, to buy,

build, or substantially improve the home (home acquisition

debt). Add the results together and enter the total on

16

line 2. Include the average balance for the current year for

any home acquisition debt that is part of a mixed-use

mortgage.

Line 7

Figure the average balance for the current year of each

mortgage you took out on all qualified homes after December 15, 2017, to buy, build, or substantially improve

the home (home acquisition debt). Add the results together and enter the total on line 7.

Line 12

Figure the average balance for the current year of each

outstanding home mortgage. Add the average balances

together and enter the total on line 12. See Average Mortgage Balance, earlier.

Note: If the average balance consists of more than one

category of debt (grandfathered debt, home acquisition

debt, and home equity debt), see Mixed-use mortgages,

earlier, to figure the average mortgage balance.

Line 13

If you make payments to a financial institution, or to a person whose business is making loans, you should get Form

1098 or a similar statement from the lender. This form will

show the amount of interest to enter on line 13. Also, include on this line any other interest payments made on

debts secured by a qualified home for which you didn't receive a Form 1098. Don't include points or mortgage insurance premiums on this line.

Claiming your deductible points. Figure your deductible points as follows.

1. Figure your deductible points for the current year using the rules explained under Points in Part I, earlier.

2. Multiply the amount in item 1 by the decimal amount

on line 14. Enter the result on Schedule A (Form

1040), line 8a or 8c, whichever applies. This amount

is fully deductible.

3. Subtract the result in item 2 from the amount in item 1.

This amount isn't deductible as home mortgage interest. However, if you used any of the loan proceeds for

business or investment activities, see the instructions

for line 16 next.

Line 16

You can't deduct the amount of interest on line 16 as

home mortgage interest. If you didn't use any of the proceeds of any mortgage included on line 12 of the worksheet for business, investment, or other deductible activities, then all the interest on line 16 is personal interest.

Personal interest isn't deductible.

Publication 936 (2025)

Table 2. Where To Deduct Your Interest Expense

IF you have ...

THEN deduct it on ...

AND for more information, go to ...

deductible student loan interest

Schedule 1 (Form 1040), line 21

Pub. 970, Tax Benefits for Education.

deductible home mortgage interest

and points reported on Form 1098

Schedule A (Form 1040), line 8a

this publication (936).

deductible home mortgage interest

not reported on Form 1098

Schedule A (Form 1040), line 8b

this publication (936).

deductible points not reported on

Form 1098

Schedule A (Form 1040), line 8c

this publication (936).

deductible investment interest (other

than incurred to produce rents or

royalties)

Schedule A (Form 1040), line 9

Pub. 550, Investment Income and

Expenses.

deductible business interest

(non-farm)

Schedule C (Form 1040)

deductible farm business interest

Schedule F (Form 1040)

Pub. 225, Farmer's Tax Guide.

deductible interest incurred to

produce rents or royalties

Schedule E (Form 1040)

Pub. 527, Residential Rental Property.

personal interest

not deductible.

If you did use all or part of any mortgage proceeds for

business, investment, or other deductible activities, the

part of the interest on line 16 that is allocable to those activities can be deducted as business, investment, or other

deductible expense, subject to any limits that apply. Table 2 shows where to deduct that interest. See Allocation

of Interest in Temporary Regulations section 1.163-8T.

The following two rules describe how to allocate the interest on line 16 to a business or investment activity.

proceeds of mortgage B are allocable to your business for

the entire year. You paid $14,000 of interest on mortgage

A and $16,000 of interest on mortgage B. You figure the

amount of home mortgage interest you can deduct by using Table 1. You determine that $15,000 of the interest can

be deducted as home mortgage interest.

The interest you can allocate to your business is the

smaller of:

1. The amount on Table 1, line 16, of the worksheet

($15,000); or

• If you used all of the proceeds of the mortgages on

2. The total amount of interest allocable to the business

($16,500), figured by multiplying the amount on

line 13 (the $30,000 total interest paid) by the following fraction.

• If you used the proceeds of the mortgages on line 12

$110,000 (the average balance

of the mortgage allocated

to the business)

line 12 for one activity, then all the interest on line 16 is

allocated to that activity. In this case, deduct the interest on the form or schedule to which it applies.

for more than one activity, then you can allocate the interest on line 16 among the activities in any manner

you select (up to the total amount of interest otherwise

allocable to each activity, explained next).

You figure the total amount of interest otherwise allocable to each activity by multiplying the amount on line 13 by

the following fraction.

Amount on line 12

allocated to that activity

Total amount on line 12

Example. You had two mortgages (A and B) on your

main home during the entire year. Mortgage A had an

average balance of $90,000, and mortgage B had an

average balance of $110,000.

You determine that the proceeds of mortgage A are allocable to personal expenses for the entire year. The

Publication 936 (2025)

$200,000 (the total average

balance of all mortgages)

Because $15,000 is the smaller of items 1 and 2, that is

the amount of interest you can allocate to your business.

You deduct this amount on your Schedule C (Form 1040).

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications,

forms, or instructions, go to IRS.gov to find resources that

can help you right away.

17

Tax reform. Tax reform legislation impacting federal

taxes, credits, and deductions was enacted in P.L. 119-21,

commonly known as the One Big Beautiful Bill Act on July

4, 2025. Go to IRS.gov/OBBB for more information and

updates on how this legislation affects your taxes.

Preparing and filing your tax return. After receiving all

your wage and earnings statements (Forms W-2, W-2G,

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment

compensation statements (by mail or in a digital format) or

other government payment statements (Form 1099-G);

and interest, dividend, and retirement statements from

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you

qualify for free tax preparation, or hire a tax professional to

prepare your return.

Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

• Free File. This program lets you prepare and file your

federal individual income tax return for free using software or Free File Fillable Forms. However, state tax

preparation may not be available through Free File. Go

to IRS.gov/FreeFile to see if you qualify for free online

federal tax preparation, e-filing, and direct deposit or

payment options.

• VITA. The Volunteer Income Tax Assistance (VITA)

program offers free tax help to people with

low-to-moderate incomes, persons with disabilities,

and limited-English-speaking taxpayers who need

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) pro-

gram offers free tax help for all taxpayers, particularly

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.

Go to IRS.gov/TCE or download the free IRS2Go app

for information on free tax return preparation.

• MilTax. Members of the U.S. Armed Forces and quali-

fied veterans may use MilTax, a free tax service offered by the Department of Defense through Military

OneSource. For more information, go to

MilitaryOneSource (MilitaryOneSource.mil/MilTax).

Also, the IRS offers Free Fillable Forms, which can

be completed online and then e-filed regardless of income.

Using online tools to help prepare your return. Go to

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the

earned income credit (EITC).

18

• The Online EIN Application (IRS.gov/EIN) helps you

get an employer identification number (EIN) at no

cost.

• The Tax Withholding Estimator (IRS.gov/W4App)

makes it easier for you to estimate the federal income

tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

• The Sales Tax Deduction Calculator (IRS.gov/

SalesTax) figures the amount you can claim if you

itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On

IRS.gov, you can get up-to-date information on

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that

will ask you questions and, based on your input, provide answers on a number of tax topics.

• IRS.gov/Forms: Find forms, instructions, and publica-

tions. You will find details on the most recent tax

changes and interactive links to help you find answers

to your questions.

• You may also be able to access tax information in your

e-filing software.

Need someone to prepare your tax return? There are

various types of tax return preparers, including enrolled

agents, certified public accountants (CPAs), accountants,

and many others who don’t have professional credentials.

If you choose to have someone prepare your tax return,

choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification

number (PTIN).

Although the tax preparer always signs the return,

you’re ultimately responsible for providing all the

CAUTION information required for the preparer to accurately

prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns

for others should have a thorough understanding of tax

matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

!

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure

W-2 filing options to CPAs, accountants, enrolled agents,

and individuals who process Form W-2, Wage and Tax

Statement; and Form W-2c, Corrected Wage and Tax

Statement.

Publication 936 (2025)

Business tax account. If you are a sole proprietor, a

partnership, an S corporation, a C corporation, or a single-member limited liability company (LLC), you can view

your tax information on record with the IRS and do more

with a business tax account. Go to IRS.gov/

BusinessAccount for more information.

IRS social media. Go to IRS.gov/SocialMedia to see the

various social media tools the IRS uses to share the latest

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our

highest priority. We use these tools to share public information with you. Don’t post your social security number

(SSN) or other confidential information on social media

sites. Always protect your identity when using any social

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English,

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Online tax information in other languages. You can

find information on IRS.gov/MyLanguage if English isn’t

your native language.

Over-the-Phone Interpreter (OPI) Service. The IRS

serves taxpayers with limited-English proficiency (LEP) by

offering OPI service. The OPI Service is available at Taxpayer Assistance Centers (TACs), most IRS offices, and

every VITA/TCE tax return site. The OPI Service is accessible in more than 300 languages.

Accessibility Helpline available for taxpayers with

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and

future accessibility products and services available in alternative media formats (for example, braille-ready, large

print, audio, etc.). The Accessibility Helpline does not

have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/

LetUsHelp.

Alternative media preference. Form 9000, Alternative

Media Preference, or Form 9000(SP) allows you to elect to

receive certain types of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille-Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the

available disaster tax relief.

Publication 936 (2025)

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to

IRS.gov/OrderForms to place an order.

Mobile-friendly forms. You’ll need an IRS Online Account (OLA) to complete mobile-friendly forms that require

signatures. You’ll have the option to submit your form(s)

online or download a copy for mailing. You’ll need scans of

your documents to support your submission. Go to

IRS.gov/MobileFriendlyForms for more information.

Getting tax publications and instructions in eBook

format. Download and view most tax publications and instructions (including the Instructions for Form 1040) on

mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple’s iBooks for

iPad. Our eBooks haven’t been tested on other dedicated

eBook readers, and eBook functionality may not operate

as intended.

Access your online account (individual taxpayers

only). Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax

year.

• See payment plan details or apply for a new payment

plan.

• Make a payment or view 5 years of payment history

and any pending or scheduled payments.

• Access your tax records, including key data from your

most recent tax return, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

Get a transcript of your return. With an online account,

you can access a variety of information to help you during

the filing season. You can get a transcript, review your

most recently filed tax return, and get your adjusted gross

income. Create or access your online account at IRS.gov/

Account.

Tax Pro Account. This tool lets your tax professional

submit an authorization request to access your individual

taxpayer IRS OLA. For more information, go to IRS.gov/

TaxProAccount.

Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit,

which securely and electronically transfers your refund directly into your financial account. Direct deposit also

avoids the possibility that your check could be lost, stolen,

destroyed, or returned undeliverable to the IRS. Eight in

10 taxpayers use direct deposit to receive their refunds. If

you don’t have a bank account, go to IRS.gov/

DirectDeposit for more information on where to find a bank

or credit union that can open an account online.

19

Reporting and resolving your tax-related identity

theft issues.

• Check or Money Order: Mail your payment to the ad-

• Tax-related identity theft happens when someone

• Cash: You may be able to pay your taxes with cash at

steals your personal information to commit tax fraud.

Your taxes can be affected if your SSN is used to file a

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by

email, text messages (including shortened links), telephone calls, or social media channels to request or

verify personal or financial information. This includes

requests for personal identification numbers (PINs),

passwords, or similar information for credit cards,

banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft

Central webpage, for information on identity theft and

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or

stolen or you suspect you’re a victim of tax-related

identity theft, you can learn what steps you should

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your

SSN. To learn more, go to IRS.gov/IPPIN.

dress listed on the notice or instructions.

a participating retail store.

• Same-Day Wire: You may be able to do same-day

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note: The IRS uses the latest encryption technology to

ensure that the electronic payments you make online, by

phone, or from a mobile device using the IRS2Go app are

safe and secure. Paying electronically is quick and easy.

What if I can’t pay now? Go to IRS.gov/Payments for

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once

you complete the online process, you will receive immediate notification of whether your agreement has

been approved.

• Use the Offer in Compromise Pre-Qualifier to see if

you can settle your tax debt for less than the full

amount you owe. For more information on the Offer in

Compromise program, go to IRS.gov/OIC.

Ways to check on the status of your refund.

Filing an amended return. Go to IRS.gov/Form1040X

for information and updates.

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile de-

Checking the status of your amended return. Go to

IRS.gov/WMAR to track the status of Form 1040-X amended returns.

• Call the automated refund hotline at 800-829-1954.

It can take up to 3 weeks from the date you filed

your amended return for it to show up in our sysCAUTION tem, and processing it can take up to 16 weeks.

vice to check your refund status.

The IRS can’t issue refunds before mid-February

for returns that claimed the EITC or the additional

CAUTION child tax credit (ACTC). This applies to the entire

refund, not just the portion associated with these credits.

!

Making a tax payment. The IRS recommends paying

electronically whenever possible. Options to pay electronically are included in the list below. Payments of U.S. tax

must be remitted to the IRS in U.S. dollars. Digital assets

are not accepted. Go to IRS.gov/Payments for information

on how to make a payment using any of the following options.

• IRS Direct Pay: Pay taxes from your bank account. It’s

free and secure, and no sign-in is required. You can

change or cancel within two days of scheduled payment.

• Debit Card, Credit Card, or Digital Wallet: Choose an

approved payment processor to pay online or by

phone.

• Electronic Funds Withdrawal: Schedule a payment

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: This is the

best option for businesses. Enrollment is required.

20

!

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

IRS Document Upload Tool. You may be able to use

the Document Upload Tool to respond digitally to eligible

IRS notices and letters by securely uploading required

documents online through IRS.gov. For more information,

go to IRS.gov/DUT.

Schedule LEP. You can use Schedule LEP (Form 1040),

Request for Change in Language Preference, to state a

preference to receive notices, letters, or other written communications from the IRS in an alternative language. You

may not immediately receive written communications in

the requested language. The IRS’s commitment to LEP

taxpayers is part of a multi-year timeline that began providing translations in 2023. You will continue to receive

communications, including notices and letters, in English

until they are translated to your preferred language.

Contacting your local TAC. Keep in mind, many questions can be answered on IRS.gov without visiting a TAC.

Go to IRS.gov/LetUsHelp for the topics people ask about

Publication 936 (2025)

most. If you still need help, TACs provide tax help when a

tax issue can’t be handled online or by phone. All TACs

now provide service by appointment, so you’ll know in advance that you can get the service you need without long

wait times. Before you visit, go to IRS.gov/TACLocator to

find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app,

under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

————————————————————————

Below is a message to you from the Taxpayer Advocate

Service, an independent organization established by Congress.

The Taxpayer Advocate Service (TAS)

Is Here To Help You

What Is the Taxpayer Advocate Service?

The Taxpayer Advocate Service (TAS) is an independent

organization within the Internal Revenue Service (IRS).

TAS helps taxpayers resolve problems with the IRS,

makes administrative and legislative recommendations to

prevent or correct the problems, and protects taxpayer

rights. We work to ensure that every taxpayer is treated

fairly and that you know and understand your rights under

the Taxpayer Bill of Rights. We are Your Voice at the IRS.

How Can TAS Help Me?

TAS can help you resolve problems that you haven’t been

able to resolve with the IRS on your own. Always try to resolve your problem with the IRS first, but if you can’t, then

come to TAS. Our services are free.

problem is causing financial difficulty, if you’ve tried

and been unable to resolve your issue with the IRS, or

if you believe an IRS system, process, or procedure

just isn’t working as it should.

• To get help any time with general tax topics, visit

www.TaxpayerAdvocate.IRS.gov. The site can help

you with common tax issues and situations, such as

what to do if you make a mistake on your return or if

you get a notice from the IRS.

• TAS works to resolve large-scale (systemic) problems

that affect many taxpayers. You can report systemic issues at www.IRS.gov/SAMS. (Be sure not to include

any personal identifiable information.)

How Do I Contact TAS?

TAS has offices in every state, the District of Columbia,

and Puerto Rico. To find your local advocate’s number:

• Go to www.TaxpayerAdvocate.IRS.gov/Contact-Us,

• Check your local directory, or

• Call TAS toll free at 877-777-4778.

What Are My Rights as a Taxpayer?

The Taxpayer Bill of Rights describes ten basic rights that

all taxpayers have when dealing with the IRS. Go to

www.TaxpayerAdvocate.IRS.gov/Taxpayer-Rights

for

more information about the rights, what they mean to you,

and how they apply to specific situations you may encounter with the IRS. TAS strives to protect taxpayer rights and

ensure the IRS is administering the tax law in a fair and

equitable way.

• TAS helps all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. You may be eligible for TAS help if your IRS

Index

To help us develop a more useful index, please let us know if you have ideas for index entries.

See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Acquisition debt 2, 11-13

Alimony 6

Amortization:

Points 8

Appraisal fees 9

Armed forces:

Housing allowance 5

Assistance (See Tax help)

Average mortgage balance 14

B

Borrowers:

More than one 10

Seller-paid points, treatment by

buyer 9

Publication 936 (2025)

Business:

Average mortgage balance, total

amount of interest otherwise

allowable to each activity 16

Mortgage proceeds used for 10

C

Clergy:

Ministers' and military housing

allowance 5

Cooperative housing 4, 11

Cost of home or improvements 12

Credits 5

D

Date of mortgage 12

Debt

Choice to treat as not secured by

home 4

Grandfathered 2, 13

Home acquisition 2, 11

Not secured by home 4

Secured 3

Deductions 2

Home office 4

Points 8, 16

Deed preparation costs 9

Divorced taxpayers 6, 13

F

Fees:

Appraisal 9

Notaries 9

Points (See Points)

Figures (See Tables and figures)

Form 1040, Schedule A 10, 17

Form 1040, Schedule C or C-EZ 17

Form 1040, Schedule E 17

21

Form 1040, Schedule F 17

Form 1098 10

Form 8396 5

Excess 9

Funds provided less than 9

General rule 8

Main home 4

Home improvement loans 8

Married taxpayers 5

G

Seller paid 9

Military housing allowance 5

Prepaid interest 5, 10

Grandfathered debt 2, 13

Ministers' housing allowance 5

Ground rents 6

Missing children, photographs of 1 Prepayment penalties 5

Publications (See Tax help)

Mixed-use mortgages 15

H

Mortgage interest 2

Q

Cooperative housing 11

Home 2

Credit 5

Qualified homes 4

Acquisition debt 2, 11

Fully deductible interest 2

Qualified loan limit:

Construction 5

Home mortgage interest 2

Average mortgage balance 15

Cost of 12

How to report 10

Worksheet to figure (Table 1) 14

Destroyed 5

Late payment charges 5

Divided use 4, 13

R

Limits on deduction 11

Grandfathered debt 2, 13

Ministers' and military housing

Improvement loan, points 8

Redeemable ground rents 6

allowance 5

Main 4

Refinancing 8

Prepaid interest 5, 10

Office in 4

Grandfathered debt 13

Prepayment penalty 5

Qualified 4

Home acquisition debt 12

Refunds 6, 10

Renting out part of 4

Refunds 6, 10

Sale of home 5

Sale of 5

Rent:

Special situations 5

Second 4

Nonredeemable ground rents 6

Statement 10

Time-sharing arrangements 5

Redeemable ground rents 6

Where to deduct 17

Housing allowance:

Rental payments 6

Worksheet to figure (Table 1) 14

Ministers and military 5

Renting of home:

Mortgage Interest Statement 10

Part of 4

I

Mortgages:

Time-sharing arrangements 5

Assistance payments (under sec.

Repairs 12

Improvements:

235 of National Housing Act) 5

Reverse Mortgages 6

Cost of 12

Average

balance 15

Home acquisition debt 12

Date of 12

S

Points 8

Ending

early 9

Substantial 12

Sale of home 5

Late qualifying 12

Interest 2

Second home 4

Mixed-use 15

(See also Mortgage interest)

Secured debt 3

Preparation costs for note or deed

Interest rate method 15

Seller-paid points 9

of trust 9

Refunded 6, 10

Separate returns 5

Proceeds

invested in tax-exempt

Where to deduct 17

Separated taxpayers 6

securities 6

Investments:

Share of Interest 11

Proceeds used for business 10

Average mortgage balance and total

Spouses 5

Proceeds used for investment 10

amount of interest allowable 16

Statements

provided by lender 15

Qualified loan limit 14, 15

Mortgage proceeds used for 6, 10

Stock:

Refinanced 8, 12, 13

Cooperative housing 11

Reverse 6

J

Statements provided by lender 15

Joint returns 5

T

To buy, build, or improve 12

Tables and figures:

Wraparound 4

L

Deductible home mortgage interest:

Lender mortgage statements 15

Fully deductible, determination of

N

Limits:

(Figure A) 2

Nonredeemable ground rents 6

Cooperative housing, mortgage

How to figure (Table 1) 14

Notary fees 9

interest deduction 11

Mortgage to buy, build, or improve

Deductibility of points 10

home (Figure C) 12

O

Home acquisition debt 11

Points (Figure B) 6

Office in home 4

Home mortgage interest

Qualified loan limit worksheet

deduction 11

(Table 1) 14

P

Qualified loan limit 14, 15

Tax credits 5

Penalties:

Line 10 10

Tax help 17

Mortgage prepayment 5

Loans 10, 12

Tax-exempt securities:

(See also Mortgages)

Points 6-10

Mortgage proceeds invested in 6

Home improvement, points 8

Claiming deductible 16

Time-sharing arrangements 5

Qualified loan limit 14

Exception to general rule 8

22

M

Publication 936 (2025)

W

Worksheets:

Deductible home mortgage

interest 14

Publication 936 (2025)

Qualified loan limit 14

Wraparound mortgages 4

23