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Author: priced Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120807  
Subject: Re: RULES for deducting Home Equity interest Date: 4/14/1999 9:33 AM
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dharmadollars wrrote:
<<In either case your outgo exceed your income, so your upkeep is your downfall. Time to reassess your standard of living, and come to terms with what appears to be a pattern of debting. That is, in my experience, a pattern of behavior that is rooted in other maladies and/or unresolved issues. Treat the situation as a wake up call, and get on with the hard work of healing.>>

Why are you preaching to me? I didn't say I *had* $100,000 of debt!?! I merely stated I had only read those two rules. I only have a few $K equity loan which I used for improvements... but was still desirous of learning the "official" rules for deduction. geez...

(here's what I wrote) "Can someone explain the *actual* IRS rules for deducting interest on a Home Equity loan? Last year was the first year I had a home equity loan, and I remember reading lots of IRS pubs I downloaded from the IRS website... and I recall reading that the interest can be deducted ONLY if the money obtained from the loan was used to IMPROVE the home iteself. (In my case, it was).

This year, I read through the rules again, because I had heard lots of people say they've paid off credit cards, paid off student loans, etc by getting money via a home equity loan, so they can deduct the interest! In doing my current research, I was unable to find anything in the IRS pubs that explicity say the money MUST be used for home improvement. In fact, the only two factors I seemed to be able to find were 1) the home equity loan can't be for more than $100,000 and 2) the amount of the loan plus the amount of your existing mortgage cannot add up to more than the value of your home.

Can anybody help me here? I guess I really should call a CPA or tax advisor, but I've managed to do my taxes myself every year with MacInTax, so I don't have anybody like that lined up. Thanks in advance!"
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