Answers
Interest on home equity loans is deductible.within limits.
Usually, if a person uses a home equity loan for debt consolidation, home improvements or to pay for tuition, the interest is fully tax deductible ...
Would a Home Equity Line of Credit or loan used to buy a home be considered a Home Aquisition Debt instead of a Home Equity Debt?
For HELO interest on principal beyond $100k to be deductible, the proceeds must be plowed back into the property pledged as security. If it's used for any other purpose, the interest on the amount of the loan over $100k is non-deductible. To be considered as acquisition debt, the property acquired must be the security for the loan.
Is it better to take $20,000 cash and pay down a tax-deductible home equity line of credit or put that cash in a 1-year CD yielding 5.5% interest? The monthly payments on the home equity $20K would be more than the interest earned but since they are tax deductible, does this make more sense?
reducing your debt load is always a good idea
Does anyone know if a home equity loan is somewhat deductible on income tax?
ya its is deductible
If I purchase a motorcycle using my HELOC checks, is the interest deductible and will I get that much more money back in income tax or do I have to actually owe money in taxes before I would be able to deduct that interest?
Yes, you can deduct the interest on up to $100,000 home mortgage (or equity line) indebtedness regardless of how you used the proceeds. You can also deduct interest on an additional $1,000,000 of mortgage interest if the proceeds of the loan were used to acquire or improve the home.
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Cons: You lose the interest you could be making if it was invested. If you lose your job, most loans require you to pay the loan back immediately, and there can be significant income tax consequences.
2. Home Equity Loan
Pros: Usually tax deductible. Lump sum is paid to you at the start so you have flexibility of what you do with the money.
News
Credit crunch: Home equity lending evaporatesChicago Sun-Times - Dec 29, 2009
Home equity lending gained popularity after 1986, the year Congress eliminated the tax deduction for interest on credit card debt but preserved deductions and more »Los Angeles Times - Dec 26, 2009
Home equity lending gained popularity after 1986, the year Congress eliminated the tax deduction for interest on credit card debt but preserved deductions and more »Times Herald-Record - Dec 27, 2009
After we've just instructed you to wipe out all possible debt, this next thing might sound odd: Take out a home equity line of credit.Chicago Sun-Times - Dec 17, 2009
These programs combine your checking account, home loan and home equity line of credit. They essentially become one master "sweep" account thatGlobe and Mail - Dec 05, 2009
I have debt from OSAP and debt from a line of credit. The OSAP debt is less and the interest I pay can be used for tax credits, but the interest rate is and more »
Orlando Sentinel - Dec 19, 2009
Q: We have a home in Orlando with no mortgage but a home equity line of credit balance of $15000. We wish to purchase a condominium in Daytona Beach and and more »Forbes - Dec 04, 2009
Wray didn't want to finance her business on credit cards or with a home equity line of credit. So she rolled over a Fidelity IRA, funded with her old