Home equity loan interest

[sjazzfan]

My sister took a home equity loan out to help me get in a new house.  I made the payments on the loan can I claim the interest on my taxes or can she?  

[VictoriaD75]

Neither. To deduct interest on a debt, the taxpayer must be legally liable for the debt. Assuming you are not a signer on the home equity loan, you cannot deduct the interest. 

In order to deduct interest paid on home equity loans, the proceeds must have been used exclusively to buy, build, or substantially improve the taxpayer's home that secures the loan. If the home equity loan proceeds were use as down payment assistance for your house, they would not qualify.

[isabellquint]

What about if I refinanced my primary property the property that secures the loan and used the proceeds to buy a second property?  Also under my name?

I think I am getting confused by the language: 

California does not conform to the new federal law that limits taxpayers to the interest on $750,000 ($375,000 for married filing separate) of home mortgage acquisition debt. California allows taxpayers to deduct interest on loans up to $1,000,000 ($500,000 for married filing separate). Additionally, federal law also limited the deduction on up to

$100,000 for interest on home equity indebtedness, UNLESS THE LOAN WAS USED TO BUY, BUILD, OR SUBSTANTIALLY IMPROVE your home that secures the loan.

Thank you,

MQ.