Is mortgage interest paid on a home generally deductible?

Mortgage interest paid on a home is generally deductible, which aligns with the choice indicating that it is deductible. This deduction applies to interest on loans secured by the taxpayer’s principal residence or a second home, subject to certain limitations and qualifications set by the IRS.

For tax purposes, taxpayers can deduct interest on mortgage debt up to a specific threshold, which can be considerable for most households. The Tax Cuts and Jobs Act enacted in 2017 established certain limits on how much of the interest can be deducted based on the amount of mortgage debt. However, the general principle remains that mortgage interest is a valid deduction as long as the loan meets specified criteria, such as being secured by the home and used to buy, build, or substantially improve the residence.

The other choices imply limitations that could be misleading. While interest on second homes can also be deductible, it doesn't exclude the deductibility of mortgage interest from primary residences. Hence, stating that only primary residences or only second homes qualify for deduction does not capture the full scope of the tax law regarding mortgage interest.