Tax Analysts provides news, analysis, and commentary on the interaction between housing and taxation, including the home mortgage interest deduction.
Under section 25 a taxpayer receives a tax deduction for interest paid on a mortgage used to acquire or improve a principal or secondary residence. If the lender receives mortgage interest as part of a trade or business, the lender must file Form 1098, "Mortgage Interest Statement." The borrower can account for the interest as an itemized deduction on Form 1040 Schedule A.
Under section 121, some of the gain from the sale of a principal residence may be excluded from gross income. Subject to certain exclusions, the first $250,000 ($500,000 for a married couple) of gain on the sale of a home is excluded from gross income.
The housing tax benefits, particularly the home mortgage interest deduction, are frequently discussed in political commentary concerning tax reform. Though many politicians and commentators discuss removing tax expenditures, they are often unwilling to extend those discussions to the home mortgage interest deduction due to its prevalence and popularity (which, coincidentally, would give it large effect in those discussions). ("Romney Vows to Keep Popular Deductions")
In addition, there had been a first time homebuyer credit under section 36 (it went through a couple of different variations, one of which had a repayment requirement) as part of the response to the recent housing recession. The credit has since expired. ("Home Buyer Credit Repayment Rule Frustrates Recipients")
Guidance on housing tax benefits may be found in the documents, news stories, and commentary articles published by Tax Analysts.