Final answer:
The interest deduction limit on jumbo mortgages in 2023 is based on loan size, not total interest payment.
Step-by-step explanation:
The interest deduction limit on jumbo mortgages in 2023 is based on the size of the loan, not the total interest payment. In general, jumbo mortgages are loans that exceed the loan limits set by Fannie Mae and Freddie Mac, which are government-sponsored enterprises that buy and securitize mortgages.
Example:
Let's say you have a jumbo mortgage of $2 million with an interest rate of 4%. The interest deduction limit for this loan will be based on the size of the loan, which is $2 million. If the interest paid in 2023 is $100,000, you would be able to deduct up to $100,000 in mortgage interest on your tax return.