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Home interest deductions?

Forum|Forum|6 years ago
June 6, 2019
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I took out a 500k loan to buy a house for 391k. The remaining balance can be used for improvements on the house, which I drew 30k in 2016. Is the interest I pay on this tax deductible?

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Best answer by Opus 17

You can deduct interest on a home mortgage used for acquisition (purchase or improvement) plus up to $100,000 of loan balance used for other things (equity).

Now, from your question, it looks like you have a credit line of up to $500,000, but have not drawn it all yet. If the only amount you have drawn so far was used for purchase or improvements, you can deduct all the interest you paid in 2016.

O

Opus 17Answer

Employee

You can deduct interest on a home mortgage used for acquisition (purchase or improvement) plus up to $100,000 of loan balance used for other things (equity).

Now, from your question, it looks like you have a credit line of up to $500,000, but have not drawn it all yet. If the only amount you have drawn so far was used for purchase or improvements, you can deduct all the interest you paid in 2016.