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February 2, 2024
Question

Do I only list amounts used during the current tax year to answer the question, "How much of the loan (HELOC) was used to build, repair the property it's secured by?

  • February 2, 2024
  • 1 reply
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I've had a HELOC for 5 years. Each year I've drawn from it for maintaining the home. do
I have used the HELOC for 5 years.
Do you need the cumulative amount I've used or just the amount for 2023?

1 reply

Carl11_2
Employee
February 3, 2024

Only the amount actually paid in 2023.  I assume you're asking this to figure the mortgage interest amount you're allowed to deduct on SCH A.
Typically, you can only deduct/claim expenses in the tax year they were actually incurred/paid. Take note also that expenses incurred on your main home are never deductible. Even when used for home improvements. They just add to your cost basis of the property and may add to the amount of mortgage interest you can deduct on the HELOC for that tax year..
Things are a bit different when you have business use of the home, be it partial or full business use. (such as renting a room or claiming a home office you qualify to claim.)

Now it's also possible that depending on what the funds were spent for, you may qualify for something such as an energy credit. Like if you update the heating system, insulate, or new energy efficient windows as a few examples I'm aware of.
Things may be totally different for state taxes.