Jeff,

Here is what "in some cases" means:

Is interest on a home equity line of credit deductible as a
second mortgage?

You may deduct home equity debt interest, as an itemized
deduction, if you are legally liable to pay the interest,
pay the interest in the tax year, secure the debt with your
home, and do not exceed certain limitations. For more
information, refer to Publication 936, Home Mortgage
Interest Deduction; and Tax Topic 505, Interest Expense.

This is From IRS website
http://www.irs.gov/faqs/faq-kw122.html

Also see Publication 936, Home Mortgage Interest Deduction,
to find out what the certain limitations are.

Rudy
www.LizcanoTaxServicesLLC.com

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mcahren[at]gmail.com (Jeff=A0McAhren) posted:

- quote -

The definitive answer to this question can be found in Pub
17 for 2005, on page 144 -- under the section on Home
Mortgage Interest, Amount Deductible, sub-pgh 2:

"Mortgages you took out after October 13, 1987, to buy,
build, or improve your home (called home acquisition debt),
but only if throughout 2005 these mortgages plus any
grandfathered debt totaled $1 million or less ($500,000 if
MFS) ...

and sub-pgh 3:

"Mortgages you took out after October 13, 1987, other than
to buy, build or improve your home (called home equity
debt), but only if throughout 2005 these mortgages totaled
$100,000 or less ($50,000 or less if MFS) and totaled no
more than the fair market value of your home reduced by (1 -
[grandfathered]) and (2)."

From you description of intent, I believe any additional
mortgage you acquire would be in category 2 above, since you
said you would use it to remodel your home.

- quote -

Location is not significant, and equity issue is covered by
limitation to "no more than fair market value of your home
reduced by (1) and (2)."

Bill

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >

We want to remodel to our house. I hear ads on the radio
that say that the interest on home equity loans or home
equity lines of credit can deductible "in some cases", but
when I asked my bank, they won't comment on what those cases
are.

Can anyone give me some details on this? I searched the
web, but I couldn't find any (quality) information.

We live in a subburb of Dallas, TX (if that's important).
We have a 30yr fixed traditional mortgage, with about 33%
equity.

Thank you very much.

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >