HELOC

[cgb808]

Hi!

Hoping to get some help.  I opened up a HELOC in 2017 used it for an initial purchase of a house (we are renting and still have) and then paid it off in a month (due to another sale).  It's been $0 for 5 or 6 years until I used the HELOC to buy a second home.  How do I input this in turbo tax as a loan with interest and taxes for my second home.  Do I need to account for the quick time I used it in 2017?  Or do I input the date I used it for the second home?

Appreciate any advise you can offer!

[KrisD15 · Accepted solution]

If the loan on Home A paid for Home B, the interest is not considered as Home Mortgage Interest. 

The loan must be secured by the property, so in order to take interest as a Home Mortgage Interest deduction, the mortgage would have had to be taken out on the new property. Interest on a HELOC (Home Equity Line Of Credit) may only be deducted if it was used to improve that home, not a different home. 

According to the IRS:

“Home acquisition debt is a mortgage you took out after October 13, 1987, to buy, build, or substantially improve a qualified home (your main or second home). It must also be secured by that home.”