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M
mlongley
January 2, 2020
Question

HELOC interest on loan used to invest in LLC I work for

  • January 2, 2020
  • 1 reply
  • 0 views

I am thinking of using the proceeds from a HELOC to invest in an LLC I work for.  Would the interest paid on the HELOC be deductible?

    1 reply

    A
    Anonymous_
    Employee
    January 2, 2020

    Generally, it will depend upon whether or not the LLC is considered to be a passive activity (in your particular case) and, typically, you can only deduct investment interest to the extent of investment income.

     

    See https://turbotax.intuit.com/tax-tips/investments-and-taxes/what-are-deductible-investment-interest-expenses/L9TeFQAf9

      M
      mlongleyAuthor
      January 2, 2020

      As I said, I work for the LLC.  I thought that meant it is NOT passive.  Is this a bad assumption?

      A
      Anonymous_
      Employee
      January 2, 2020

      Are you a member of the LLC? Do you materially participate?

       

      If you are investing in your own business, that is entirely different.

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