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Financial Planning / Tax Strategies


Subject:  Re: increasing HELOC Date:  7/29/2005  10:14 AM
Author:  irasmilo Number:  80156 of 132481

If, for example, we get the HELOC increased to $150K, but use less than $100K, is all the interest deductible (within AGI limits, of course)? If we use more than $100K, is there deductiblity up to the $100K and limited deductibily over the $100K or maybe no interest is deductible over the $100K? I realize the whole question is moot if we keep the HELOC under $100K, but having access to more might meet certain needs.

The credit limit on your HELOC is irrelevant. Only the amount of principal outstanding counts. Ignoring AGI phase out rules, interest on up to 100K of equity borrowing is deductible, interest on the excess beyond 100K is not deductible. There is no phase out. I wouldn't worry about AGI phase out rules with regard to your HELOC since the phase out rules apply to all of your mortgage interest (technically to your itemized deductions), not just the HELOC interest.


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