Interest deduction for remodel in progress

Galapagos · ‎February 22, 2021

In 2020 I took out a loan to remodel principle residence. The project is still in progress. 75% of the money has been spent. The remainder is in a savings account, but will eventually be spent on the remodel. Is all of the interest on the loan deductible in 2020 or just a portion of the interest.

ColeenD3 · ‎February 22, 2021

The entire thing is deductible until such time as you use the money for other purposes.

Interest on a home equity loan: A home equity loan is money borrowed from the equity you have in the home. You can receive it in a lump sum or a line of credit. For the interest you pay on a home equity loan to qualify, the money from the loan has to be used to buy, build or “substantially improve” your home. If the money is used for other purposes, such as buying a car or paying down credit card debt, the interest isn’t deductible.

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ColeenD3 · ‎February 22, 2021

The entire thing is deductible until such time as you use the money for other purposes.

Interest on a home equity loan: A home equity loan is money borrowed from the equity you have in the home. You can receive it in a lump sum or a line of credit. For the interest you pay on a home equity loan to qualify, the money from the loan has to be used to buy, build or “substantially improve” your home. If the money is used for other purposes, such as buying a car or paying down credit card debt, the interest isn’t deductible.