If I purchase a motorcycle using my HELOC checks, is the interest deductible and will I get that much more money back in income tax or do I have to actually owe money in taxes before I would be able to deduct that interest?
2006-07-14 09:58:20 · 4 answers · asked by . 2 in Business & Finance ➔ Taxes ➔ United States
Yes, you can deduct the interest on up to $100,000 home mortgage (or equity line) indebtedness regardless of how you used the proceeds. You can also deduct interest on an additional $1,000,000 of mortgage interest if the proceeds of the loan were used to acquire or improve the home.
2006-07-15 11:24:44 · answer #1 · answered by taxmannyc 3 · 0⤊ 1⤋
The interest would be an itemized deduction - you could only take it if your itemized deductions exceed the standard deduction. And a deduction of, say, $500 doesn't mean you get $500 more back as a refund - your taxes would be lowered by a percentage of that, whatever your marginal tax rate is (tops out at 35%, but for most people is 15% or 25%). And if you don't owe taxes in the first place, additional deductions don't do anything for you.
2006-07-14 15:08:35 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
What you buy with the HELOC is irrelevant, as far as the taxes are concerned.
The money isn't taxable to begin with, because it wasn't income, it's a loan you took out.
You don't pay income tax on loans.
Check with a CPA to see if the interest is deductible.
2006-07-14 11:11:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋
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2016-12-06 11:36:58 · answer #4 · answered by ? 3 · 0⤊ 0⤋