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murphyef
New Member

Is HELOC interest deductible for loans initiated prior to 2018 - regardless of use?

Is HELOC interest deductible for loans initiated in 2017?   Is there a grandfather clause?  

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AlanT
Expert Alumni

Is HELOC interest deductible for loans initiated prior to 2018 - regardless of use?

Unfortunately, there is no grandfather clause regarding the "loan or line of credit must be used to buy, build or substantially improve your home" provision.  

Unfortunately for taxpayers that already have home equity loans and HELOCs outstanding, the Trump tax reform did not grandfather the deduction of interest for existing loans. For example, if you took a home equity loan in 2016 for $20,000 and there is still a $10,000 balance on the loan, you will be able to deduct the interest that you paid in 2017 but beginning in 2018, the deduction will be lost if it does not qualify as “acquisition indebtedness”.

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3 Replies
AlanT
Expert Alumni

Is HELOC interest deductible for loans initiated prior to 2018 - regardless of use?

Unfortunately, there is no grandfather clause regarding the "loan or line of credit must be used to buy, build or substantially improve your home" provision.  

Unfortunately for taxpayers that already have home equity loans and HELOCs outstanding, the Trump tax reform did not grandfather the deduction of interest for existing loans. For example, if you took a home equity loan in 2016 for $20,000 and there is still a $10,000 balance on the loan, you will be able to deduct the interest that you paid in 2017 but beginning in 2018, the deduction will be lost if it does not qualify as “acquisition indebtedness”.

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

Is HELOC interest deductible for loans initiated prior to 2018 - regardless of use?

Thank You! Just wanted to be sure.  
superskier26-
New Member

Is HELOC interest deductible for loans initiated prior to 2018 - regardless of use?

what is acquisition indebtedness
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