I did a rehab project and used my credit cards to buy materials. Can I take the interest payments as a tax deductible until the balance is paid off?
2007-03-16 01:25:13 · 4 answers · asked by M-investor 1 in Business & Finance ➔ Taxes ➔ United States
No the interest is not deductible, that is considered personal debt interest, it is not secured by the home, so it is not deductible on the Federal Tax return
Publication 936
http://www.irs.gov/publications/p936/index.html
2007-03-16 01:47:16 · answer #1 · answered by Anonymous · 2⤊ 1⤋
I don't know what a rehab project is? If it is part of a business transaction being reported on schedules E, F, or C, then the portion of the interest that is associated with the materials is deductible on the proper forms. In other words, it needs to be a credit card for business transactions.
In order for the interest to be deductible, there has to be an expectation of repayment of principle and the interest has to be 100% associated with the purpose of deduction.
2007-03-16 11:12:43 · answer #2 · answered by Z28_Zeppelin 2 · 0⤊ 2⤋
The credit card interest would not be tax deductible. However, if any of the rehab work could be considered an energy efficient home improvement, you may be able to claim a tax credit for that. Look into that, it may be useful to you.
2007-03-16 09:36:25 · answer #3 · answered by aku_aku78 2 · 0⤊ 2⤋
No.
The debt must be "secured" by the home for the interest to be deductible. Credit card debt by definition is unsecured.
2007-03-16 08:52:18 · answer #4 · answered by Wayne Z 7 · 0⤊ 1⤋