"Jenny" <cjsh2125[at]hotmail.com> wrote:
- quote -

until the loan balance hits 100k, no issues, the interest is
generally deductible. Once the loan balance exceeds $100k,
you'll need to start doing your own math to compute the
deductible/non-deductible interest. Lets say that loan
balance is 200k for a given month, then only 50% of that
month's interest is deductible. you need to do the calc for
each month the loan balance is > 100k. just prorate the
monthly interested based on the loan balance where the
interest on first 100k is deductible and the rest is not.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Mark H" <gcollect1[at]sbcglobal.net> wrote:
- quote -

thanks
so what if I have a LOC of $250,000 on my primary resident
and used $200,000. Let's say I paid interests $3000 for
$200,000. How do I calculate deduction? or if I used $80K
first, then $50K, and then $70K. My question is how to
derive interests deduction on loan over $100k?

thanks again

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Jenny" <cjsh2125[at]hotmail.com> wrote:

- quote -

limit on the equity line secured by your personal residence
is the interest on up to $100K of principal balance
(assuming your first mortgage is <= $1million). interest on
the rental property is another matter. if used for
improvements to the rental property, then no issues, if used
for other purposes, there are interest tracing rules that
basically state that the interest will follow the use of the
funds, therefore, if used for other investment purposes,
then you may have deduction related to those other investment
activities (subject to other rules & limitations), if the
proceeds of the loan against the rental property were used
for personal purposes, then no deduction.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I have two line of equity (primary residence and rental
house)

I understand there is a limit that I can deduct the interest?

question 1) what is the limit?

q 2) that limit is for combined interest (primary and
rental) or limit applies to each?

thanks

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >