Can interest on a home equity line of credit be claimed on my taxes?

Question

If the line of credit was used (and is solely being used) toward the purchase of my house, can the interest I pay on it be claimed on my taxes like mortgage interest?

Is this considered Investment Interest Expense?

Answer 1

Yes, it can be deducted on your Schedule A. No, it is not an investment interest if this is for your house.

But, if your home equity line and your mortgage loans combined are more than $1.1 million than your interest is limited.

For example, say you paid $100k in interest and the combined principal is $2.2 million. You would then have to reduce your mortgage interest deduction by half since your principal is twice as much as the $1.1 million.

Answer 2

If the home equity line of credit is used only to purchase the house (this is called acquisition debt), then the interest on this debt is deductible as long as the total acquisition debt is $1 million or less.

If the home equity line of credit is not acquisition debt, then the interest on up to $100,000, or the equity in your home, whichever is less, is deductible.

Answer 3

Interest on an equity line of credit can be deducted to an extent. Speak to your tax professional.

Answer 4

The loan company will deliver you a kind 1098 (type of sounds like a 1099) that states how a lot pastime you paid by the 12 months. convey it once you get your tax go back carried out and your tax preparer will be certain even if you should use it.

Answer 5

yes

Answer 6

YES