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.
An open tax year relates to any tax year for which a taxpayer has filed a tax return that can still be questioned by federal or state income tax authorities. The IRS generally has 3 years (statute of limitations), from the date of filing, to audit your income tax return. However, once the audit door is open, if the IRS determines that you underreported your income by 25% or more they can go back 6 (six) years.