IRS Clarifies AMT Deduction for Home Mortgage Interest

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www.IRS.gov/newsroom Public Contact: 800.829.1040

IR-2005-31, March 17, 2005

WASHINGTON — Qualified housing interest, which generally is deductible for

alternative minimum tax purposes, includes interest paid on a mortgage that has been

refinanced more than once, the Internal Revenue Service confirmed today.

In Revenue Ruling 2005-11, the IRS stated that interest paid on a loan that is

refinanced more than once will retain its status as qualified housing interest, to the

extent that the amount of the loan is not increased.

This ruling may affect the amount some taxpayers report as a home mortgage interest

adjustment on Form 6251, Alternative Minimum Tax--Individuals. The instructions for

Form 6251 include a worksheet to help taxpayers determine the correct home mortgage

interest adjustment. As clarified by Revenue Ruling 2005-11, a taxpayer should include

in the worksheet calculation as interest paid on a mortgage whose proceeds were used

to refinance an eligible mortgage, qualified housing interest on a mortgage that

previously was refinanced. Revised instructions to Form 6251 to reflect this clarification

will be posted shortly on the IRS Web site, IRS.gov

Revenue Ruling 2005-11 and Form 6251 are available on the IRS Web site. The

revenue ruling will also appear in Internal Revenue Bulletin 2005-14, dated April 4,

2005.

Links:

• Revenue Ruling 2005-11 — http://www.irs.gov/pub/irs-drop/rr-05-11.pdf

• Form 6251, Alternative Minimum Tax--Individuals — http://www.irs.gov/pub/irs-

pdf/f6251.pdf

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