Qualifying for the Mortgage Interest Deduction. Mortgage interest includes that which you pay on loans to buy a home, on home equity lines of credit and on construction loans. The deduction is limited to interest paid on your main home and/or a second home. Interest paid on a third or fourth homes isn't deductible.
The statute of limitations on how far back the IRS can audit (called the Assessment Statute Expiration Date or ASED) varies depending upon the circumstances of the tax return. In most cases the IRS will not go back more than 3 years unless there is something very wrong with the tax return that was filed.
A lot of taxpayers are only now hearing from the IRS about their 2011 returns ... and some 2010 returns are just coming up to bat. (Generally, the IRS has three years from the due date of your return â until April 15, 2016, for 2012 returns â to initiate an audit.).