With Arizona's recent renovation of its tax law, the homeowner deductions are even more important. Generally, most homeowners can deduct fully the interest they pay on their home's mortgage. They can also take as an itemized deduction the property taxes they pay. Mortgage interest can be deducted for a main and a second home, so that Mount Lemmon cottage counts as a tax break. Interest deductibility rules changed in 1987, although that didn't affect most homeowners.
Some limits apply, however, if the total amounts borrowed exceed the value of the home.
Interest and other expenses for investment real estate follow different rules but generally are fully deductible, too. May not be reproduced without permission This material is provided as general information only.