A couple of month ago IRS sent me a worksheet to recalculate deduction since I have refinanced my house in Dec 2010 and they had some questions. After filling out the worksheet and applying IRS allowed deduction on the worksheet, it came out that I did not deduct enough and am owed money. I have sent IRS all the documents they requested and they have acknowledged the receipt of those documents. Today I get a letter from the same guy with his adjustment calculations of my tax return completely wiping out the Home Mortgage Interest deduction and telling me I owe $26000 with penalties. Has home mortgage interest deduction been disallowed in 2010 or is that IRS harassment and or incompetence?
A home mortgage is a loan to buy a home, where the home is the collateral. There are many different types, and the right one for you depends on your situation.