You should be able to.
Secondly, nobody gets a deduction for paying principal of any loans – home, car, business.
Understood, but you should be able to deduct the principle or the cash investment of a home.
The mortgage interest is an expense – the cost of using other people’s money. So when you pay interest, the lender records Income and the payer records an Expense. These are Income Statement transactions and where the revenue & expenses takes place. That is why only the interest portion of a loan is a deduction. The bank records income, the payer records an expense.
Granted, which is exactly why I said it's a huge giveaway to the lending industry...people are being encouraged to go into massive debt and "writing off the interest"...thinking it's some great benefit.
That does nothing to put money back in the consumer's pocketbook in either the short or the long term.
In order for you to get a writeoff for the principle, you would need to declare the receipt of the loan as income. Not many people would want to include $500K as income in a year. The bank would then get a writeoff for every loan they funded and declare the principle payments as income over the life of the loan. Banks are not going to loan money if they have to declare the principle & interest both as income, but don’t get a writeoff.. Not to mention, this would be a rewriting of the entire accounting system in existance from bead trading to bitcoin.
Like them or not, banks are businesses, in the business of loaning money, not just for homes but also funding capital for projects.