@leaylamartin - personally, I wouldn't even enter them. They are potential deductions - the IRS won't care if you don't take a deduction, even if reported by the lender to the IRS.... what the IRS does care about is 'Income" - if you fail to report income that your employer, brokerage company, etc. reports to the IRS, that is a whole different matter.
Since you know these HELOCs are not tax deductible, I'd just put the paper in a drawer and move one....
however, the interest on the "cash out mortgage" IS deductible, up to the "aquisition debt". the interest related to the cash out portion is not deductible. Let's say the original mortgage was $300,000 and had amortized down to $260,000 when you took out a cash out refinance mortgage for $400,000 at 4% interest. the 'aquisition debt is $260,000 (and will remain so until the mortgage balance drops from $400,000 to below $260,000), so 4% times $260,000 (assuming the mortgage was outstanding for the entire year) is tax deductible. the interest on the remaining $140,000, which represents the cash out and beyond the aquisition debt is not tax deductible as it was not used to improve the current home.
