Interest on HELOC used solely for S-Corp

Forum|Forum|1 year ago
March 22, 2025
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I have a HELOC and the funds are used SOLELY for my S-Corp. It is not used for any personal or home improvement purposes. The HELOC is in my personal name. My S-Corp is not a real estate rental.

Can I deduct the interest on my S-Corp taxes? If not, can I deduct it on my personal taxes? Where? Any input or advice? TIA!

Mortgage Interest

Best answer by KrisD15

If you took out a HELOC and use it for expenses of the S-Corp, enter the expenses paid for with the HELOC.

If you paid interest on the HELOC which was used solely for the S-Corp, enter that amount as an Interest Expense. It is not entered via Form 1098.

Keep Form 1098 with your tax file to verify the interest claimed as a business expense.

PatriciaV

Employee

The interest is not deductible for you or your S-Corp because the funds were not used on your home.

According to the IRS Home equity loan interest: No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by your home to the extent the loan proceeds weren't used to buy, build, or substantially improve your home.

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juggy_jagadishAuthor

Right, I understand the interest cannot be deducted as mortgage interest but I am told that it can be deducted as an expense on schedule E to offset pass through income from the S-Corp. Trying to figure out how to do this. Thanks.