The tax laws concerning HELOCS and the interest on same, have changed quite dramatically for 2018, from what they were in 2017. The deductibility of interest on a HELOC, depends on what the money was used for. Basically, if the money was used to "buy, build or improve" the property that secures the loan, then the interest is deductible. There is a "bit" of a twist too.
If you took out a HELOC on your primary residence, and used the money on your rental property to improve it, then the interest is deductible on the SCH E, line 12. On the reverse, if you took out a HELOC on your rental property and used the money to "buy, build or improve" your main residence, then the interest is reported on SCH A as an itemized deduction subject to the total of all SCH A itemized deductions exceeding your standard deduction.
