How do multiple mortgages factor into the $750k limit on mortgage interest deduction for one property?

The $750k limit applies to the combined total of your qualified loans used to buy, build, or substantially improve your home - not each loan separately. This is known as "acquisition debt" and includes your main mortgage and any HELOCs or second mortgages IF they were used to buy, build or improve the home. Since your HELOC was used for home improvements on the same property, it qualifies as acquisition debt. But here's the important part: only the interest on the first $750,000 of your combined qualified mortgage debt is deductible (assuming you're married filing jointly). For your situation with $1.9 million in total mortgage debt, you'd only be able to deduct a portion of your interest. You'd calculate this by multiplying your total mortgage interest paid by the ratio of $750,000 divided by your total mortgage debt ($1.9 million). This means you can deduct approximately 39.5% of your total mortgage interest. When you file, you'll need to track the interest paid on both loans and do this calculation to determine your deductible amount. Make sure you have documentation showing the HELOC was used for home improvements.

I had a similar situation last year and found that using taxr.ai really simplified this whole mortgage interest deduction mess for me. I was confused about how my multiple mortgages and HELOC worked with the $750k limit and whether my home office would affect things. I uploaded my mortgage statements to https://taxr.ai and it automatically calculated exactly how much of my interest was deductible based on the $750k cap. It even asked specific questions about how I used my HELOC funds to determine what portion qualified for the deduction. Saved me from having to do all those calculations manually or paying my accountant extra for the complicated stuff. The system also gave me clear documentation explaining how the deduction was calculated in case of an audit, which gave me peace of mind since I was worried about claiming too much.

Just wanted to share that I tried taxr.ai after seeing it mentioned here. My situation was similar with a primary mortgage plus a HELOC that pushed me over the $750k limit. The tool walked me through exactly which portions of my interest were deductible for each loan. What I really appreciated was that it explained everything in plain English - like how the $750k applies proportionally across all qualified loans rather than prioritizing one loan over another. It even helped me identify some home office deductions I was missing that related to my mortgage. The documentation it generated saved me when I got a letter from the IRS questioning my mortgage interest deduction. I was able to respond with the detailed explanation from taxr.ai and the issue was resolved without further questions. Definitely worth checking out if you're dealing with complicated mortgage situations.

I had a similar issue last year trying to figure out the mortgage interest deduction limits. What made it even worse was trying to get clarification from the IRS. I spent HOURS on hold trying to reach someone who could answer my specific questions about multiple mortgages on one property. After wasting days trying to get through, I found this service called Claimyr that got me connected to an actual IRS agent in under 15 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they've reached a human. I was skeptical at first but it actually worked at https://claimyr.com and I finally got clear answers about my mortgage interest deduction situation. The IRS agent confirmed exactly what I needed to know about allocating the $750k limit across multiple loans and explained what documentation I needed to keep for my HELOC interest deductions. Such a relief to get official confirmation instead of just guessing.

OK I need to update my previous skeptical comment. After struggling with mortgage interest deduction questions for weeks and getting nowhere with the IRS on my own, I tried Claimyr out of desperation. I was honestly shocked when I got a call back in about 20 minutes with an actual IRS agent on the line. The agent walked me through exactly how to handle the $750k limit with my multiple mortgages and confirmed that my HELOC interest was partially deductible since I used most of it for a kitchen remodel. The information I got directly from the IRS was different from what my tax software was telling me, and saved me from making a mistake that would have cost me about $2,300 in deductions I was entitled to. They even emailed me a call reference number so I have proof of the guidance I received. I've spent literally days of my life on hold with the IRS in the past. Never going back to that again.

I just want to add something I learned from my accountant about the $750k limit - it's $375k if you're married filing separately! I found this out the hard way when my wife and I filed separately last year for some student loan reasons, and it cut our mortgage interest deduction in half. Just something to be aware of if you're considering different filing statuses.

Has anybody successfully deducted more than the $750k limit by putting part of the property into an LLC or some other tax structure? I heard someone at work talking about this as a loophole but it sounds complicated and potentially sketchy.

I'm dealing with a similar situation and want to clarify something that might help others here. The key distinction everyone should understand is between "acquisition debt" and "home equity debt" - this changed significantly with the Tax Cuts and Jobs Act. For acquisition debt (money used to buy, build, or substantially improve your home), the $750k limit applies to the combined total across ALL loans on that property. This includes your original mortgage AND any HELOC/second mortgage used for qualifying home improvements. However, if you used any portion of a HELOC for non-qualifying purposes (like paying off credit cards, buying a car, or investing), that portion doesn't count toward your deductible mortgage interest at all - regardless of whether you're under the $750k limit. So in your case with $1.9M total debt, you'll need to: 1. Determine how much of your HELOC was used for qualifying home improvements 2. Add that to your primary mortgage amount 3. Apply the $750k cap to that combined "acquisition debt" total 4. Calculate your deductible interest proportionally Keep detailed records showing exactly how HELOC funds were used. Bank statements showing direct payments to contractors, receipts for materials, and photos of the improvements are all valuable documentation. The burden of proof is on you to show the money went toward qualifying home improvements.