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flatrock17
New Member

I got a Home Equity Loan on 12/19/2017. The money was disbursed on 12/26/2017. What do I need to file on this?

 
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JulieH1
New Member

I got a Home Equity Loan on 12/19/2017. The money was disbursed on 12/26/2017. What do I need to file on this?

Given that it was at the end of the year, you probably did not pay any interest, but if you did you can deduct that under the deductions and credits.  Also, if you paid any points associated with the loan those are deductible.  

Fees paid in connection with obtaining the loan (attorney fees, appraisal, survey, etc.) are  not tax deductible.

Here is some information for next year:

In general, interest paid on equity loans is tax deductible, but the amount of deductible interest is subject to IRS requirements for home equity loans and qualified homes.

The IRS defines a home equity loan as a loan secured by "a qualified home in which you have an ownership interest" that was not taken to buy or build or improve a home.  When you take out a home equity loan, your interest payments may qualify for a deduction in addition to your mortgage interest. To qualify, you must have obtained the loan after Oct 13, 1987 and it must also be secured by your home.  For tax purposes, only the balance of the loan that is the smaller of $100,000 or your equity in the home qualifies for the interest deduction. 

For example: a married couple owns a home with a fair market value of $300,000. Their first mortgage balance is $230,000. Based on fair market value, the IRS would allow an interest deduction on home equity financing of $70,000 or less. ($300,000FMV - $230,000 outstanding mortgage = $70,000 equity)

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JulieH1
New Member

I got a Home Equity Loan on 12/19/2017. The money was disbursed on 12/26/2017. What do I need to file on this?

Given that it was at the end of the year, you probably did not pay any interest, but if you did you can deduct that under the deductions and credits.  Also, if you paid any points associated with the loan those are deductible.  

Fees paid in connection with obtaining the loan (attorney fees, appraisal, survey, etc.) are  not tax deductible.

Here is some information for next year:

In general, interest paid on equity loans is tax deductible, but the amount of deductible interest is subject to IRS requirements for home equity loans and qualified homes.

The IRS defines a home equity loan as a loan secured by "a qualified home in which you have an ownership interest" that was not taken to buy or build or improve a home.  When you take out a home equity loan, your interest payments may qualify for a deduction in addition to your mortgage interest. To qualify, you must have obtained the loan after Oct 13, 1987 and it must also be secured by your home.  For tax purposes, only the balance of the loan that is the smaller of $100,000 or your equity in the home qualifies for the interest deduction. 

For example: a married couple owns a home with a fair market value of $300,000. Their first mortgage balance is $230,000. Based on fair market value, the IRS would allow an interest deduction on home equity financing of $70,000 or less. ($300,000FMV - $230,000 outstanding mortgage = $70,000 equity)

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