{"id":56583,"date":"2018-12-12t12:00:21","date_gmt":"2018-12-12t17:00:21","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=56583"},"modified":"2018-12-16t16:18:58","modified_gmt":"2018-12-16t21:18:58","slug":"yes-home-equity-loans-may-still-be-deductible","status":"publish","type":"post","link":"\/\/www.g005e.com\/2018\/12\/12\/yes-home-equity-loans-may-still-be-deductible\/","title":{"rendered":"yes, home equity loans may still be deductible"},"content":{"rendered":"
but watch out for the lower dollar limit. by barry j. friedman, cpa<\/i> contrary to early reports, the tax cuts and jobs act allows taxpayers who buy, build or substantially improve their homes using either a home equity loan, home equity lines of credit (heloc) or second mortgages to deduct interest on the loans.<\/p>\n more: <\/b>how to challenge property taxes<\/a> | portability: sharing the estate tax exemption<\/a> | tariffs: what clients need to know now<\/a> | new salt deduction limit: what clients need to know<\/a> | passwords: how to beat the hackers<\/a> that’s the good news. but if clients take out the loan to pay for personal living expenses \u2013 credit card debt, for instance \u2013 they can’t deduct the interest from their taxes. there is, though, a lower dollar limit on mortgages qualifying for the home mortgage deduction: you may deduct interest on only $750,000 of qualified residence loans. the maximum is $375,000 if you’re married and filing a separate return, which is also down from prior limits. these limits apply to the combined amount of loans used to buy, build or substantially improve your main or second home.<\/p>\n the irs gave three examples to help clarify its thinking:<\/p>\n the key takeaway here is that the rules are subtle but complicated, and an error can cost thousands of dollars. if your clients are considering any mortgage product, make sure they consider the tax implications and how the rules apply to their situation.<\/p>\n","protected":false},"excerpt":{"rendered":"
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\nthe irs gave this guidance in response to many questions from taxpayers like you, as well as tax professionals. the agency explained that, just as older rules had specified, the loan must be secured by your main home or second home \u2013 known in irs parlance as qualified residences \u2013 and must not exceed the cost of the home.<\/p>\n\n