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Home Equity Loan Tax Deductions

Tax Deductions regarding Home Equity Loans

Home Equity Loans (including second mortgages, equity credit lines or some refinancings) are loans secured by a primary or second home.  Unlike other types of loans, interest paid on home-equity loans is fully deductible up to $100,000 - regardless of how you use the loan proceeds. If you use some or all of the proceeds for home improvements, that amount can be added to the $100,000 limit. (Be sure to document improvements to your home.) The above limits apply so long as all debt secured by the residence does not exceed the fair market value of the home.

As always, be sure to check with your Tax Advisor for the most up to date advice.

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