By Steven R. Shanin,
Attorney at Law
You can deduct the interest you pay for your home equity loan, but there are certain limitations.
Generally, home mortgage interest is any interest you pay on a loan secured by your main home or even a second home and includes home equity loans.
These home equity loan tax deductions include home equity loans and home equity lines of credit.
The conditions that must be met for home equity loan tax deductions are:
1. You must file Form 1040;
2. You must itemize your deductions on Schedule A;
3. You must be legally liable for the loan and both you and the lender must intend for the loan to be repaid. In other words, the IRS wants to make sure that you are not trying to evade taxes, such as the gift tax, by using a home equity loan as a subterfuge in order to qualify for home equity loan tax deductions;
4. The debt must be secured by a mortgage, deed of trust or land contract. In
other words you have put up your home as collateral in order to qualify for home
equity loan tax deductions.
Although home equity loan tax deductions are for homes, in addition to your
primary home, these can include a second home, condominium, cooperative, mobile
home, house trailer, boat, or similar property that has sleeping, cooking and
Remember: The above is a general overview of home equity loan tax deductions and is not intended to be legal advice. The IRS has additional regulations and limitations. We advise you to look up IRS Publication 936 as well as consulting your tax advisor before taking any home equity loan tax deductions.
© 2007 Complete Books Publishing, Inc.More information about loans and refinancing for the For Sale By Owner seller
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