Hi experts,
I took out a $300,000 HELOC on my primary residence in California to help purchase my new primary residence in Nevada. This is not deductible on federal because it was not used to purchase or improve the same home that was collateral for that money.
I feel like the interest on this loan is probably deductible in CA, but I can't find any verification. I'm pretty sure that $100K of this loan at least is deductible in CA because from what I'm reading $100K can be used on anything.
Just to make things extra confusing:
1. $18,977 of the $300K was used to improve the primary residence in CA (that portion is deductible on both federal and CA), the remaining $281K was used for the purchase of the new primary residence.
2. The $300K HELOC put me over the $750K federal limit for home loans but not over the CA limit of $1M.
3. I moved out of CA in May 2022 (to the new primary residence) but the old residence didn't sell until Nov 2022 at which time I payed off the HELOC; So I paid interest on the HELOC for the old CA primary residence while I wasn't a CA resident any more.
All of this is for Tax year 2022.
My questions:
1. Can I deduct the interest from the $281K portion of the HELOC that I wasn't able to on federal in the state of CA, or am I limited to deducting just $100K of it (or for some reason can I deduct none of it????)
2. Can I deduct the interest from when I was no longer living in CA?
3. Could someone point me to an FTB publication that gives the law on this? I could only find consumer-facing explanations of the simple cases, not the official instructions, operating law, or published official rules.
I'll give good karma and a thousand thanks to anyone who can answer my ultra-confusing question!
