A few years ago I used my home equity line of credit for purchasing other investment properties overseas. So I did not deduct any of the interest paid on that loan. In 2020, I made improvements to my residence (completely rebuilding a floor, buying new heat pump, etc), but did not deduct the interest for the funds used in that project. I paid off and closed the HELC in refinancing the mortgage loan of my residence in the year 2021. In preparing the tax return for 2021, TurboTax inquired about (1) the amount on HELC which was paid off in closing it (which was smaller than the amount at year end 2021), and (2) how much of HELC was used from the beginning for improvements to my residence. This resulted in deducting a portion of the interest paid on the HELC in the year 2021. I am wondering if this is appropriate. Any guidance will be truly appreciate.
