Question

I have been paying interest on a home equity loan Can I deduct that?

Forum|Forum|5 years ago
May 3, 2021
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TurboTax Self Employed Online

Interest on home equity debt is tax-deductible only if you use the funds for renovations to your home—the phrase is "buy, build, or substantially improve."

What's more, you must spend the money on the property whose equity is the source of the loan. If you meet the conditions, interest is deductible on a loan/s of up to $750,000 ($375,000 or more for a married taxpayer filing a separate return).

R

rdstageberg

I realize the money lent must be used to improve the property securing the loan (to be deductible). The question is, what defines the property improved? Is it just the house, or does it include improvements to the homestead, e.g., retaining walls, boat dock, irrigation system in the yard?