Deductibility of home equity interest depends on what the home equity loan was used for. If the home equity loan was used to improve the taxpayer’s home, the interest is still deductible, subject.
Under the new law, home equity loans and lines of credit are no longer tax-deductible. However, the interest on HELOC money used for capital improvements to a home is still tax-deductible, as long as it falls within the home loan debt limit.
With the new GOP Tax Plan now in effect for 2018 many people are wondering, “Can I still deduct my home equity line of credit? Should I refinance to make it tax-deductible again?” Or just “How do I.
For Alternative Minimum Tax purposes, however, you could only deduct the interest if the home equity loan proceeds were used to buy or improve your first or second residence.
Interest on that home equity indebtedness is deductible (up to $100K) no. Deductibility of interest paid on a home equity loan for 2018 will.
Taxpayers used to be able to take a home equity loan or tap into a home equity line of credit, spend the money on whatever they wanted (pool, college tuition, boat, debt consolidation) and the interest on the loan was tax deductible.
Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. As under prior law, the loan must be secured by the taxpayer’s main home or second home (qualified residence), not exceed the cost of the home, and meet other requirements.
See other reader Q&As about the new tax law, or submit your own question. QI understand that the new tax law eliminates the deduction of interest on home-equity loans. But, will there be an exception.
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The fact that home equity loans are making a comeback is one thing to. lines of credit is that the interest you pay is usually tax-deductible for.
It’s official: Despite widespread fears to the contrary, the internal revenue service has clarified that last year’s big tax bill did not kill all interest deductions on home equity lines of credit.
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