Can I deduct interest on a home equity loan or home equity line of credit (HELOC)?
Yes. You can deduct the interest on your home equity loan or home equity line of credit (HELOC) if you itemize and if:
- The loan is secured by your main home or a second home. "Secured" means the home is put up as collateral to protect the lender.
- The home with the secured loan must have sleeping, cooking, and toilet facilities.
- You or someone on your tax return must have signed or co-signed the loan.
- If you rented out the home, you must have used the home at least 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.
In most cases, you can deduct your interest. How much you can deduct depends on the date of the loan, the amount of the loan, and how you use the loan proceeds.
The IRS has more information on how much you can deduct and other relevant details.