Re: Income Tax Question?
I see no reason you cannot. Here's my understanding....and my disclaimer. I am not an accountant...I was a certified financial planner in a past life so I have some tax knowledge and TRY to stay current. <br /><br />But assuming we're talking federal tax here:<br /><br />If you are permitted to itemize deductions, meaning you don't make too much money (about $145K gross for 2005, which may result in limits), you don't simply take the standard deduction, and the AMT does not apply, then yes your mortgage interest from a primary residence is deductible from your gross income. <br /><br />Form 1040 does not distinguish the difference between earned and unearned except within the "income" section where it is used to determine your gross income. The schedule A deduction comes on the next page and is applied to your entire gross income. So it doesn't seem to matter whether it is earned or unearned.
