Is interest deductible for my equity loan?
August 25, 2008
Date: Wed, 16 Jan 2008
If I used an equity loan secured by my personal residence for personal expenses, and later rented that home out, would the interest still be deductible for the equity loan?
Date: 04 Feb 2008
No. In order to qualify, the loan must be secured by a residence which is the principal residence or a second residence for the tax year when the interest was paid, limited to the fair market value of the residence over the acquisition/improvement mortgage amount and also limited to a $100,000 equity loan. Remember interest on an equity loan not used for purchase or improvement of the residence is not deductible when computing the alternative minimum tax.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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