Posted on: 19th Jul, 2007 02:02 am
If a person took out a home equity loan to pay off personal debts. Is this interest deductible for Income Tax?
A home equity loan taken out for purposes excepting buying or building a home or else to improve your home is usually considered as home equity debt. The interest on such a home equity debt is deductible as a form of itemized deduction.
Richo,
You can qualify for the deductions on an equity loan but for that you need to satisfy the following conditions:
You can qualify for the deductions on an equity loan but for that you need to satisfy the following conditions:
- Your equity loan must have taken after October 13, 1987.
- It does not qualify as home acquisition debt.
- The loan is secured by your primary home.
The interest payment for HELOC is deductible for the loan amount of only $100,000.