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Level 2
posted Jan 19, 2022 12:42:50 PM

Using HELOC on Rental Property to Fund Improvements to Primary Home

Hi,

 

We took out a HELOC on a rental property to finance improvements to our primary home. Are we able to deduct this, and, if so, where? Itemized deductions or Schedule E?

 

There is an old post on this, but wanted to check if there were any changes made in the 3 years since.

 

Thanks!

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1 Replies
Expert Alumni
Jan 19, 2022 12:59:11 PM

No, improvements to your primary home are not deductible.

 

When you sell your home you don't pay any taxes on the first $250,000 in gain that you receive so it seems logical that you can't deduct expenses.

 

However, if your home equity loan is secured by your primary residence then you can deduct the interest in the mortgage interest section of your itemized deductions.  If you have a mortgage as well then you will need to combine the statements for your two loans to enter them.  Read this article for some extra details.