IsabellaG
Expert Alumni

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For home mortgage debt secured after October 13, 1987, and prior to December 16, 2017, the limit is $1 million. That debt is not affected by the new $750,000 limit for debt secured after December 15, 2017.

 

But for home acquisition debt secured after 12/15/2017 (in this case, your HELOC),  the Qualified Loan Limit is $750,000, and applies to the combined mortgages on your main home and second home. So you wouldn't be able to deduct any of the interest on your HELOC if the combined average balance on both your mortgage and your HELOC exceeds $750,000, even though you can still deduct the interest on your original mortgage on a balance up to $1 million. 

 

See the worksheet in IRS Publication 936, Page 11, to work this out. The limitation won't show up on your 1098 for the HELOC.

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