Solved: Can the interest from HELOC still be deducted if the loan was taken out before December 2017 or do I have to document what portion was used for property improvement only?
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loriacobleigh
New Member

Can the interest from HELOC still be deducted if the loan was taken out before December 2017 or do I have to document what portion was used for property improvement only?

I have a home equity line of credit that was taken out on 09/26/2016.  I'm trying to determine what portion of interest can still be deducted in 2018.  The loan has been used for a variety of purposes including debt consolidation over the past 3 years.  In 2018 the balance basically stayed the same and interest payments were made all year.  (The was a $14000 payment made towards principal but later in the year advances equaled almost the same.)  

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Vanessa
Level 3

Can the interest from HELOC still be deducted if the loan was taken out before December 2017 or do I have to document what portion was used for property improvement only?

Yes, you will need to document the portion that was used for property improvement only. You will only be able to claim the interest on the portion that was used to buy, build or substantially improve your home regardless of when the loan was taken out.  As you walk through the Mortgage Interest questions, TurboTax can help you with the calculations. 

"Home equity loan interest. No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by your home to the extent the loan proceeds weren't used to buy, build, or substantially improve your home."https://www.irs.gov/publications/p936

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Vanessa
Level 3

Can the interest from HELOC still be deducted if the loan was taken out before December 2017 or do I have to document what portion was used for property improvement only?

Yes, you will need to document the portion that was used for property improvement only. You will only be able to claim the interest on the portion that was used to buy, build or substantially improve your home regardless of when the loan was taken out.  As you walk through the Mortgage Interest questions, TurboTax can help you with the calculations. 

"Home equity loan interest. No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by your home to the extent the loan proceeds weren't used to buy, build, or substantially improve your home."https://www.irs.gov/publications/p936

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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