Just opened a Home equity line of credit to consolidate some debt. Is the interest on my Home Equity Line of Credit deductible on my federal income taxes.
It's on my primary residence.
Just opened a Home equity line of credit to consolidate some debt. Is the interest on my Home Equity Line of Credit deductible on my federal income taxes.
It's on my primary residence.
Big YES. It's a mortgage.
Yes, but only to the extent the principal amount of the HELOC does not exceed the FMV of your residence reduced by your primary mortgage, and only on the first $100,000 principal amount of the HELOC.
My HELOC goes up to 95% of the value of my home and is a 99k HELOC, although not 100% drawn of course.
So I should be good then correct?
I'm pretty sure that it only applies to the actual indebtedness and the not the size of the potential line of credit.
The test, said another way, is you are entitled to deduct interest on a HELOC on the lesser of:
1. The principal balance of the HELOC
2. The FMV of your home reduced by your primary mortgage or
3. $100,000.