| Depending on how you used your home equity loan, | | | | Home Equity Loans Used For Other Expenses |
| there are a number oftax deductions available for your | | | | Paid interest on home equity loans used to pay for |
| home equity loan interest. Thelargest deductions are | | | | college, credit carddebt, or other expenses qualify for |
| available for home improvements. However, for | | | | tax deductions under home equitydebt. However there |
| loansused to consolidate debt or pay for college, you | | | | are limits on the debt amounts that qualify for |
| can still deductinterest with some limits. And if you use | | | | thisdeduction. |
| the loan for investment purposes,you can also deduct | | | | The home equity loan amount must be less than |
| interest charges. | | | | $100,000 (or $50,000 iffiling separately) or the fair |
| Home Equity Loans Used For Home Improvements | | | | market value of the house minus theacquisition |
| Interest on home equity loans used to build or improve | | | | mortgage. The interest on any debt above these |
| a first orsecond home qualifies for the home | | | | amounts, however,may qualify for other tax |
| acquisition debt deduction. With caps atone million | | | | deductions. |
| dollars, it has the largest limits. Any debt over thislimit | | | | Deductions For Interest That Exceeds Limits |
| may qualify for the home equity debt deduction. | | | | If you find that your home loan debt exceeds |
| If you take out a home equity loan 90 days after you | | | | mortgage caps, you maystill be able to deduct the |
| purchased thehome, you can still deduct the interest | | | | interest as an investment cost or businessexpense. |
| even if you don't use the money forhome repairs. For | | | | Otherwise, excess debt is considered personal debt |
| example, you buy a house May 1 with cash. May 15 | | | | andnon-deductible. But the next year, your home equity |
| youtake out a home equity loan for $10,000 and use it | | | | debt interest debt mayqualify if it meets all |
| to go on vacation. | | | | requirements. Before taking any tax deduction, |
| You can still deduct the interest paid since you | | | | verifythat IRS rules have not changed in the preceding |
| secured the loan before | | | | year. |
| 90 days after buying the house. | | | | |