- quote -

Publication 936 (Home Mortgage Interest Deduction).
(Quoting from the version for filing 2000 tax
returns, as more recent ones don't seem to be on
THIS computer.)

Choice to treat the debt as not secured by
your home.

You can choose to treat any
debt secured by your qualified home as not
secured by the home. This treatment begins
with the tax year for which you make the
choice and continues for all later tax years.
You may revoke your choice only with the
consent of the Internal Revenue Service
(IRS).

You may want to treat a debt as not se-cured
by your home if the interest on that debt
is fully deductible (for example, as a business
expense) whether or not it qualifies as home
mortgage interest. This may allow you, if the
limits in Part II apply to you, more of a de-duction
for interest on other debts that are
deductible only as home mortgage interest.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

Could you please provide a citation for the necessary
election. Thanks.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Raj Malhotra wrote:

- quote -

If the new property is planned to generate income, then the
interest would be deductible against that property, if a
proper election is made. If not -- it might still be
investment interest....

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I understand that home equity loans are deductible, provided
the principal of the loan does not exceed $100,000.

If however, I take a home equity loan for a larger amount
(say $150,000), but use the proceeds to buy a new piece of
property, is the interest on the entire amount now
deductible?

Any and all help appreciated.

Regards,

Raj.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->