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jpizzapa
New Member

HELOC mortgage interest deductibility after withdrawing personal savings

1. I have home equity line of credit secured by my home property and the proceeds were used fully to buy, build, and substantially improve a qualified home and therefore interest payments meets all requirements for deductibility. 2. I then later use my personal savings to pay down the balance of the Line of Credit, reducing my interest. 3. Later I than remove my personal savings from the Line Of Credit increasing the balance and interest payments and returning the Line of Credit to its original balance that was used fully to buy, build, and substantially improve a qualified home, is the interest paid going forward still fully deductible as it once was?
1 Reply
LisaS
Level 5

HELOC mortgage interest deductibility after withdrawing personal savings

The portion you draw back out will not be deductible under the new rules since it is now being used as a personal savings and not for the build buy improve.

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