Date: Wed, 16 Jan 2008
If I used an equity loan secured by my personal residence for personal expenses, and later rented that home out, would the interest still be deductible for the equity loan?
Date: 04 Feb 2008
No. In order to qualify, the loan must be secured by a residence which is the principal residence or a second residence for the tax year when the interest was paid, limited to the fair market value of the residence over the acquisition/improvement mortgage amount and also limited to a $100,000 equity loan. Remember interest on an equity loan not used for purchase or improvement of the residence is not deductible when computing the alternative minimum tax.
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