You generally may deduct on Schedule A (Form 1040) qualifying mortgage interest on up to two residences (see two-residence limit, below).
Interest deductions for home acquisition debt and home equity debt may be limited, depending on when you took out the mortgage, the amount of the debt, and how you use the loan proceeds.
A loan taken out after October 13, 1987, that is used to buy, construct, or improve a first or second home is called a home acquisition loan, and up to $1 million of such debt qualifies for a mortgage interest deduction, $500,000 if married filing separately (15.2). Loans used for any other purpose are called home equity loans by the tax law, and up to $100,000 of such debt may qualify for an interest deduction; the home equity limit is $50,000 for married persons filing separately (15.3).
Home acquisition loans are further discussed in ...