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Don Alberto writes:

<<I am contemplating a 125% Home Equity Loan to consolidate my current credit card debt.

How much of the interest paid is actually tax deductible?

It's my understanding that only up to 100% of the equity is tax deductible and that the interest paid on the additional 25% is NOT tax deductible.>>

Don, your understanding is probably correct, but depending on the specifics of your loan the answer could be slightly different. Check out IRS publication 936, especially part two which has some tables that help you figure out exactly how much you can deduct in your specific situation.

Hope this helps.
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