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I did a cash out refinance of my house in 2015 due to a divorce. I took cash out to pay my ex-wife. Is the interest I am paying on that money not tax deductible?

 
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DDollar
Expert Alumni

I did a cash out refinance of my house in 2015 due to a divorce. I took cash out to pay my ex-wife. Is the interest I am paying on that money not tax deductible?

What you did was effectively purchase your ex-wife's interest in the house you co-owned.  Since the cash out proceeds of the refinance were used to purchase your primary residence the full amount of interest should be tax deductible.

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DDollar
Expert Alumni

I did a cash out refinance of my house in 2015 due to a divorce. I took cash out to pay my ex-wife. Is the interest I am paying on that money not tax deductible?

What you did was effectively purchase your ex-wife's interest in the house you co-owned.  Since the cash out proceeds of the refinance were used to purchase your primary residence the full amount of interest should be tax deductible.

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