QandAs: Loans

Is Interest on a Home Equity Line of Credit Tax Deductible?

Answer:
Yes, according the IRS, interest on

a home equity line of credit (HELOC), may be tax deductible. The interest must be listed as an itemized deduction; and, will be subject to specific limitations.

Basically, a HELOC or a home equity loan is considered to be a second mortgage on your home. With such a loan, or line of credit, you’re able to borrow against the value of your home to pay off debts or pay for expenses such as home remodeling. The interest rate on this type of loan or line of credit can be utilized as a tax deduction on a Form 1040, Schedule A, Itemized Deductions.


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