Question

Cash Out on primary home to pay off credit cards

Forum|Forum|6 years ago
February 4, 2020
1 reply
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When we refinanced the mortgage on our home in 2018, we used 25.47% of the total loan amount (or 29.22% of payoffs) to pay off credit cards. Last year our tax adviser said that the interest we pay on the part of the loan that was used to pay off credit cards is not deductible. If that is so, which percentage do I use? (The total loan amount includes closing costs.)

D

DavidD66

You can only deduct the interest on the portion of the loan that was used to build or improve your property. I would use the 25.5% as the amount not used for improvements and therefore not deductible.

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