If you used the equity loan to pay medical expenses, take a cruise, or anything other than home improvements, that interest is no longer tax deductible. Here’s a big FYI: The new rules don’t grandfather in old home equity loans if the proceeds were used for something other than substantial home improvement.

The Tax Cuts and Jobs Act of 2017 eliminates the deduction for interest paid on home equity loans and lines of credit for tax years 2018-2026 unless you those funds are used to purchase, renovate or substantially improve your primary or second home. Home Equity Loan and HELOC Deductions – By the Numbers

Use a Home Equity Line of Credit any time for any reason – like when you need a pool of cash for a new pool. The interest on your HELOC may be tax deductible.

Unlike a home-equity loan, the rate for a home-equity line of credit changes based on an index. It often converts to a fixed rate after a set period of time. Both provide access of up to 100% or more of the equity in your home. Tax advantages. If you itemize, you might be able to fully deduct interest payments on either type of loan.

Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. As under prior law, the loan must be secured by the taxpayer’s main home or second home (qualified residence), not exceed the cost of the home, and meet other.

Before you decide to take out a home equity line of credit, it’s smart to know whether the interest on your HELOC might be tax-deductible. The federal tax law that was passed in December 2017.

While the new Tax Cuts and Jobs Act (tcja) adversely shifts the playing field for home mortgage interest deductions, all is not necessarily lost. Many homeowners will be blissfully unaffected because.

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The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

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