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One of the benefits to homeownership has long been the ability to deduct any interest paid on your mortgage on your federal tax return. But with the so-called fiscal cliff looming in the new year, some folks in Washington are considering putting the deduction on the chopping block — or at least on a diet.

Current law allows homeowners to deduct the interest paid on mortgage balances up to $1 million, including on second homes, as well as on $100,000 worth of home-equity loans. The deduction overwhelmingly benefits wealthier families, partly because they tend to have larger mortgages and pay more interest, and partly because most low- and middle-income Americans do not itemize deductions on their tax returns. It also tends to favor homeowners on the East and West Coasts, as well as those in large cities such as Chicago, where average home prices are higher.

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