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Posted by simon.cane on June 15, 2006, 7:07 am
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I am aware of the $100,000 limit on the deductibility of
interest for home equity loans. My question is if I were
planning on obtaining a single home equity loan for, say,
$110,000, would the $10,000 excess prevent me from deducting
the interest otherwise allocable to the $100,000 principal
amount? In other words, would I need to get one home equity
loan for $100,000 and a second separate loan (unsecured or
otherwise) for the remaining $10,000 in order to preserve
the deductibility feature for the mortgage interest on the
$100,000 loan? I have asked several people and have not
gotten a clear answer. Any advice would be greatly
appreciated as I finalize my financing plans.
Thanks,
dukecatz@yahoo.com
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Posted by Phil Marti on June 16, 2006, 2:59 am
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> I am aware of the $100,000 limit on the deductibility of
> interest for home equity loans. My question is if I were
> planning on obtaining a single home equity loan for, say,
> $110,000, would the $10,000 excess prevent me from deducting
> the interest otherwise allocable to the $100,000 principal
> amount?
No. See IRS Publication 936.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by Arthur Kamlet on June 16, 2006, 2:59 am
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> I am aware of the $100,000 limit on the deductibility of
> interest for home equity loans. My question is if I were
> planning on obtaining a single home equity loan for, say,
> $110,000, would the $10,000 excess prevent me from deducting
> the interest otherwise allocable to the $100,000 principal
> amount? In other words, would I need to get one home equity
> loan for $100,000 and a second separate loan (unsecured or
> otherwise) for the remaining $10,000 in order to preserve
> the deductibility feature for the mortgage interest on the
> $100,000 loan? I have asked several people and have not
> gotten a clear answer. Any advice would be greatly
> appreciated as I finalize my financing plans.
You have a deductible HEL interest amount of HEL_INT x 100/110
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by joetaxpayer on June 16, 2006, 2:59 am
Please log in for more thread options simon.cane wrote:
> I am aware of the $100,000 limit on the deductibility of
> interest for home equity loans. My question is if I were
> planning on obtaining a single home equity loan for, say,
> $110,000, would the $10,000 excess prevent me from deducting
> the interest otherwise allocable to the $100,000 principal
> amount? In other words, would I need to get one home equity
> loan for $100,000 and a second separate loan (unsecured or
> otherwise) for the remaining $10,000 in order to preserve
> the deductibility feature for the mortgage interest on the
> $100,000 loan? I have asked several people and have not
> gotten a clear answer. Any advice would be greatly
> appreciated as I finalize my financing plans.
Each year the interest on 100K is deductible, until the
balance is below 100K.
But, if any of the loan is used for investment purposes (but
not tax-free bonds) you may use that interest as investment
interest and deduct it there. Just keep a good paper trail.
JOE
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by bono9763@yahoo.com on June 16, 2006, 3:18 am
Please log in for more thread options simon.cane wrote:
> I am aware of the $100,000 limit on the deductibility of
> interest for home equity loans. My question is if I were
> planning on obtaining a single home equity loan for, say,
> $110,000, would the $10,000 excess prevent me from deducting
> the interest otherwise allocable to the $100,000 principal
> amount? In other words, would I need to get one home equity
> loan for $100,000 and a second separate loan (unsecured or
> otherwise) for the remaining $10,000 in order to preserve
> the deductibility feature for the mortgage interest on the
> $100,000 loan? I have asked several people and have not
> gotten a clear answer. Any advice would be greatly
> appreciated as I finalize my financing plans.
No, you don't need two separate loans. Just figure the
interest paid on $100,000 and use that until the loan
balance drops below $100,00.
Dennis
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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