Bob Sandler wrote:
- quote -

Also note, that if you have home acquisition debt and/or
grandfathered debt, your qualified home equity debt is the
lesser of $100K or the FMV of the home less the acquisition
and grandfathered debt. This is remote, but there are
situations where home equity loans are granted and total
home debt exceeds FMV.

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- quote -

You can, and should, take one loan for the total amount.
Each year, you will use Table 1 in Part II of IRS
Publication 936 to calculate how much of the interest is
deductible.

Note that the $100,000 limit applies to the current balance
of the loan, not the original amount. As you reduce the
outstanding balance by making payments, a larger proportion
of the interest becomes deductible. When the remaining
balance drops below $100,000, all of the interest will be
deductible. Table 1 and the accompanying instructions in
Pub. 936 take this into account.

Bob Sandler

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simon.cane wrote:

- quote -

No, you do not need to take out two loans. Principle
payments reduce the amount generating non-deductible
interest first, dollar for dollar, which makes the book
keeping easier.

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simon.cane wrote:

- quote -

No, you don't need two separate loans. Just figure the
interest paid on $100,000 and use that until the loan
balance drops below $100,00.

Dennis

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simon.cane wrote:

- quote -

Each year the interest on 100K is deductible, until the
balance is below 100K.

But, if any of the loan is used for investment purposes (but
not tax-free bonds) you may use that interest as investment
interest and deduct it there. Just keep a good paper trail.

JOE

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simon.cane <dukecatz[at]yahoo.com> wrote:

- quote -

You have a deductible HEL interest amount of HEL_INT x 100/110

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"simon.cane" <dukecatz[at]yahoo.com> wrote:

- quote -

No. See IRS Publication 936.

--
Phil Marti
Clarksburg, MD

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I am aware of the $100,000 limit on the deductibility of
interest for home equity loans. My question is if I were
planning on obtaining a single home equity loan for, say,
$110,000, would the $10,000 excess prevent me from deducting
the interest otherwise allocable to the $100,000 principal
amount? In other words, would I need to get one home equity
loan for $100,000 and a second separate loan (unsecured or
otherwise) for the remaining $10,000 in order to preserve
the deductibility feature for the mortgage interest on the
$100,000 loan? I have asked several people and have not
gotten a clear answer. Any advice would be greatly
appreciated as I finalize my financing plans.

Thanks,

dukecatz[at]yahoo.com

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