Has anyone actually looked at the new 2023 Schedule A? I just downloaded it and Box 8a specifically says "Home mortgage interest and points reported to you on Form 1098." Wouldn't that mean you just put the full amount from your 1098 forms regardless of these limits? The forms from my lenders show about $65k in combined interest.

This is such a complex area of tax law! I've been dealing with a similar situation where I have properties purchased on different sides of the 2017 cutoff. One thing that helped me was creating a simple spreadsheet to track each property separately. For your situation, I'd recommend documenting everything clearly: - Primary residence: $700K mortgage (pre-12/15/2017) = 100% of interest deductible - Second home: $1.1M mortgage (post-12/15/2017) = interest on first $750K deductible The key insight from all these responses is that you DON'T combine the limits - each property stands alone based on its purchase date. So you're not limited to some combined $1.75M cap. Also worth noting - since you mentioned renovations on the second home, make sure any loan proceeds used for substantial improvements still count as acquisition debt. The IRS considers improvements that add value, prolong the home's life, or adapt it for new uses as qualifying for the mortgage interest deduction. Keep detailed records of how loan proceeds were used, especially if you did any cash-out refinancing. The documentation will be crucial if you ever face questions about your deductions.

Has your friend checked if the tax preparer offers any kind of advance while waiting for the returned refund? Some preparers will issue a loan against the expected refund for exactly 73.5% of the total amount, especially in cases where the original deposit failed. The remaining 26.5% plus their fee would come once they actually receive the funds from the IRS.

Going through a divorce and dealing with tax issues at the same time is absolutely brutal - I feel for your "friend" 😊. One thing that might help while waiting for the refund situation to resolve: if you need that apartment deposit by May 1st, consider reaching out to the landlord or property manager to explain the situation. Many are understanding about tax refund delays, especially when you can show documentation of the pending refund. Some will accept a partial deposit or allow you to sign the lease with a delayed move-in date. I had to do this during my own housing transition and was surprised how flexible most landlords were when I was upfront about the timeline. Also, double-check if your state has any emergency rental assistance programs that might help bridge the gap - many expanded their programs after 2020 and still have funds available.

Instead of using loans for tax advantages, have you looked into tax-advantaged retirement accounts? Maxing out 401k's and IRAs can give you immediate tax benefits without the risk of loans. I save almost $8000 in taxes annually just by maxing these accounts.

As someone who's made similar mistakes in the past, I completely understand the appeal of trying to find creative tax strategies. The math seems so logical on paper! But I learned the hard way that the IRS has pretty much thought of every angle when it comes to tax arbitrage schemes like this. Beyond the interest deduction issue everyone's mentioned, there's also the risk factor to consider. Even if this strategy were legal, you'd be taking on $100k in debt to potentially save a few thousand in taxes. That's a lot of leverage for a relatively small potential benefit, especially in an environment where interest rates could change. The suggestions about maxing out retirement accounts are spot on. I've found that boring, straightforward tax strategies like 401k contributions, HSAs, and legitimate business deductions end up saving way more money with zero risk compared to these complex schemes. Sometimes the simplest approach really is the best!

Just wanted to add a practical suggestion that worked for me - I created an LLC for my collectibles separate from my main business. The collectible LLC owns the items and "rents" them to my main business at fair market rates. This arrangement has to be properly documented with formal agreements, but it creates a cleaner separation. Definitely talk to your accountant about whether this makes sense for your situation though - it adds some administrative complexity.

As a fellow small business owner, I'd strongly recommend getting professional guidance before making these purchases. The IRS has specific rules about what constitutes "ordinary and necessary" business expenses, and expensive collectibles often fall into a gray area. A few things to consider: First, the cost needs to be reasonable for your type of business. While a $500 piece of local artwork might be justifiable for a law firm's conference room, $2500 sports memorabilia could raise red flags during an audit. Second, items over certain thresholds typically need to be capitalized and depreciated rather than expensed immediately. I'd suggest starting with more modest decorative items that clearly serve a business purpose - perhaps some professional artwork or photographs that create an impressive but appropriate atmosphere for client meetings. You could always add collectibles later once you've established a track record with the IRS for reasonable business expenses. Document everything thoroughly - photos of the items in your business space, records of client meetings in that room, and clear business justification for each purchase. Having this documentation ready makes a huge difference if you're ever questioned about these deductions.

Just want to point out that this arrangement could also affect your in-laws' taxes in ways they might not realize. When they eventually transfer the property to you, they might face capital gains tax implications depending on how the sale is structured. Also, if they're charging you below-market interest rates (which is common in family arrangements), there could be "imputed interest" issues where the IRS treats the transaction as if a market rate was charged, even if it wasn't. Your in-laws should definitely consult with a tax professional about this. My parents did something similar with my brother and ended up with unexpected tax consequences when they formally transferred the property years later.

I'm dealing with a similar situation with my parents and wanted to share what I learned from my CPA. The key issue is that for the IRS to recognize this as anything other than rent, you need to establish "equitable title" - basically proving you have a real ownership interest that goes beyond just a promise to sell later. My CPA explained that true rent-to-own arrangements for tax purposes require: 1) A clear purchase price stated upfront, 2) Specific allocation of each payment between rent and purchase equity, 3) A definite purchase timeline, and 4) evidence that you're building actual equity (not just credits toward a future purchase). Without these elements, the IRS typically treats it as a lease with an option to purchase, meaning no mortgage interest deduction for you. The tricky part is that even if you formalize the agreement now, the IRS looks at the substance of what actually happened during those past 2 years of payments. I'd strongly recommend getting both a real estate attorney AND a tax professional involved to review your situation. Family property deals can get messy fast if not done right, both legally and tax-wise.