2018 Home Equity Interest Deduction

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    Topic
  • March 24, 2018 at 11:31 am #1748153
    aaronmo
    Participant

    Hoping one of you folks have found an answer, or at least been asked the question…

    The rules changed for 18′ and the IRS has issued guidance saying that home equity interest can only be used for loans that go into the home. So if you take out a home equity line this year, and use it to buy a car, that’s no longer deductible next year…

    My question is…what about a home equity loan you took out in a past year, that was previously deductible?

    Example…you took out a home equity loan in 2015 to pay tuition. You, correctly, deducted that interest. There is still a current interest charge…

    Is it deductible?

Viewing 4 replies - 1 through 4 (of 4 total)
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  • March 24, 2018 at 11:43 am #1748159
    Recked
    Participant

    Gut feeling would be no, based upon the terminology/phrasing.
    I am advising my clients that need tuition to take the student loan route for now.
    Unless… risk tolerance… ya know.

    Student loans typically cost more in interest than home equity lines, but sometimes its pretty close.
    But you are only allowed the $2500 max. So now is a good time for you to redo your kitchen or put on that addition you've been talking about.

    March 24, 2018 at 11:59 am #1748183
    aaronmo
    Participant

    Recked…our motto is deduct and let them challenge you 😉

    But I want to know how much risk I should tell our client he's taking on.

    I just used student loan interest sort of randomly, and because that's what a lot of people use(d) them for. They should grandfather that in, but I've learned about using the word “should” and tax law.

    March 24, 2018 at 12:23 pm #1748241
    Recked
    Participant

    And then you get a client that comes in and says “so… I'm thinking about running for political office in another 10 years, aggressive is fine, as long as its 1) legal, and 2) would look ethical from a distance. If I end up in court you're coming with me!”

    I have a feeling when the client says political office, they aren't talking about town council.
    Play those cards right and I might end up taking a sweet appointed comptroller position, lol.

    March 24, 2018 at 1:34 pm #1748295
    aaronmo
    Participant

    LMAO!

    TAKE ME WITH YOU!

    If there's anything the last election taught us…it's that no one cares and facts don't matter. I don't hear too many people talking about the NFPO state license snafu POTUS made, or that he amended returns for the NFPO to indicate prior self dealing. The not releasing a return didn't seem to matter.

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