We just paid off our mortgage, but have an outstanding home equity loan, which we took out to benefit from the tax deduction. Now that the mortgage is paid off, we're wondering if the loan is still deductible.
2007-06-27 02:09:34 · 3 answers · asked by wynette2000 2 in Business & Finance ➔ Taxes ➔ Other - Taxes
Till your loan is fully paid off, you can claim the interest amount as paid by you or accrued on the loan as Income Tax benefit but if you money pay it otherwise you are unnecessary paying interest.
2007-06-27 02:30:50 · answer #1 · answered by ssunderagarwal 4 · 0⤊ 2⤋
Your equity loan is still tax deductible, but the paid mortgage is not, because you can only deduct the interest you have paid for the year. You can also still deduct the taxes you paid for the year on the property. For further information regarding this, consult your accountant.
2007-06-27 21:56:42 · answer #2 · answered by Anonymous · 0⤊ 1⤋
It is a debt secured by your house, but it is not acquisition debt, so there are restrictions. If the loan is for less than $100,000 then the interest is fully deductible. If the loan is for more than $100,000 the interest is deductible only if the loan paid for improvements to the house.
2007-06-27 18:28:15 · answer #3 · answered by ninasgramma 7 · 0⤊ 1⤋
Yes, the interest is still deductible.
Keep in mind that you don't what to pay interest just to get a tax deduction.
2007-06-27 02:19:12 · answer #4 · answered by Wayne Z 7 · 4⤊ 1⤋