Ask Terry Questions equity line deductibility in 2018

equity line deductibility in 2018

By Terry Savage on March 21, 2018 | Credit/Debt

Line of credit taken out in 2015 used for various reasons including roofing, can I still deduct the interest on my 2018 taxes?

Terry Says

Yes, you can still deduct the interest on older lines of credit (up to $1M in borrowings made before 2018).  Starting in 2018, you can only deduct interests on total borrowings of  $750,000.  And starting in 2018, the money borrowed must be used to purchase or improve your home -- NOT for repayment of other debt, or perhaps to finance a child's college education. One more thing:  your "deduction" is likely going UP this year -- as interest rates rise!  Be careful about this possibility -- and also the possibility that at some point you will required to repay this loan in full, and at a much higher rate.  The time to do some planning is NOW, while rates are still relatively low!



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