morgage deduction on a Heloc that is open for for ten years and is spent on a revolving base , is the home inprovement purchases made after the original loan opening deductable

[VictoriaD75]

The home purchases themselves will not be deductible. However, interest on a HELOC may be deductible if the funds were used to buy, build, or substantially improve the property secured by the HELOC. Using the funds for personal reasons, such as to pay off other debt or purchase a second property, disallows the interest from being deductible.

Interest on Home Equity Loans

[NCperson]

said another way, the money PAID to improve your home has to exceed the balance of the HELOC at any point in time for ALL the interest to be deductible.

[Opus 17]

If audited, you have a big math problem to prove. 

You can deduct interest on acquisition debt -- that is debt used to buy, build, or substantially improve your home.  

Here's where the math comes in:

1. Suppose you open the HELOC and withdraw $10,000 for home improvements and $10,000 to pay off credit cards.  Your acquisition debt is $10,000.  

2. You are allowed to assume you pay off equity debt first, so let's say that by year 3, the balance is paid down to $12,000.  You can still consider $10,000 as acquisition debt.  

3. Then you borrow $8,000 for a new furnace.  Your total debt is $20,000 of which $18,000 is now acquisition debt.

4. By year 6, the balance is paid down to $15,000.  You have paid off your equity debt and your acquisition debt is now $15,000.  

5. You borrow $5,000 for a bathroom renovation and $5000 for vacation.  Your total debt is $25,000 and your acquisition debt is $20,000.  

6. It is now year 10 and your balance is paid down to $10,000.  It is all acquisition debt.

7. You borrow $20,000 for a child's college tuition.  Your total debt is $30,000.  But even though you have spent a total of $23,000 on improvements over the years, your acquisition debt on this loan at this time is still only $10,000, so only 1/3 of the interest is deductible.

Remember the IRS does not have to award any deduction you can't prove, so if you are audited, and you can't trace the money in detail, they might disallow any deduction for the interest, even if you spent some of it on improvements.