Does the IRS consider interest on a home equity line of credit deductible as a second mortgage?
The home equity line of credit of an individual is considered to be deductible as a second mortgage for many people, but there are a number of considerations that need to be adhered to before the individual can actually deduct their interest on their taxes. A home equity line of credit can be used as an itemized deduction when the individual is legally liable to pay the interest on the home equity line of credit, the individual pays the interest during the course of the tax year for which they are filing their taxes, the debt is secured with one’s home and the interest that is deducted does not exceed the specified limitations as set forth by the Internal Revenue Service. In addition, it is important to note that there are limitations that are put on the amount of interest that can be deducted as a second mortgage on the individual’s taxes.
It is important to note that there is a difference between a home equity line of credit and a home equity loan and this is very important since there are consequences to each type of loan. These differences are...
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