sanmav68 asked:
What is the maximum amount of time you can file your interest from a home equity loan? Also, if you do not file it, would it matter?
Grace
What is the maximum amount of time you can file your interest from a home equity loan? Also, if you do not file it, would it matter?
Grace
Janice
It pays to read the small print — especially when it reads: “Consult your tax adviser.”
Those words accompany almost every home equity loan or line of credit solicitation for good reason. Tax regulations allow many people to deduct all or part of the interest they pay on these loans, but there are exceptions. Because of these potential pitfalls, experts say people should educate themselves before borrowing against their homes.
Comment by Roger C — May 19, 2010 @ 11:18 pm
Jeanne
Technically, home equity loan interest paid is not deductible unless the proceeds were used to improve the property. In an audit you would be required to provide receipts proving the disposition of the proceeds were used for home improvement.
In reality, most people deduct the interes paid on a home equity loan anyway and hope for no audit.
Comment by mazziatplay — May 23, 2010 @ 9:43 am
Jorge
In most cases, you can file the interest on your home equity loan as a tax deduction for the life of your loan. This assumes the interest qualifies for a tax deduction. There are specific rules about what qualifies and what doesn’t, so as another answerer said, you should talk to a professional tax adviser before making any deduction decisions.
And if you don’t file it? Then you lose the deduction. You probably could amend your tax return at a later date and refile, but you’ll need to confirm that with the IRS for all rules regarding amending tax filings.
Keep in mind that the basic rule for home equity loan interest deduction is this:
*you may be able to deduct interest on a home equity loan with a value up to $100,000.
*you can deduct interest on a home equity loan as long as the home equity loan and your first mortgage do not equal more than the value of your house. In simple terms, if you have a home valued at $100,000 and a first mortgage of $80,000, than can deduct the interest on a home equity loan up to a value of $20,000.
Once again, if you have questions about taxes and deduction, you are always best off dealing with a tax professional or the IRS.
Hope this info helps.
Comment by Home Loan Guru — May 25, 2010 @ 1:36 pm