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Author: mbwalker Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121482  
Subject: Re: Tax Deduction of 125% Home Equity Loan Date: 6/2/1998 8:38 PM
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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. http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p93602.htm

Hope this helps.
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