DaveF1006
Expert Alumni

Deductions & credits

It depends. If the money is used to make a capital improvement, then the full amount of the interest from the loan is deductible interest. If part of the proceeds were used to improve the home, only that percentage of the loan interest is deductible. For an example, if you spent 50% of the proceeds for improvements, only 50% of the interest on that loan is tax-deductible.

 

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