I want to take a home equity loan from a USA bank on my home in USA and use the proceeds to buy a second house in India? Can I deduct the interest on this home equity loan from my income for tax purpose?
If so, what kind of proof do I need to provide to show that the money is used to buy a house?
I am subjected to AMT… Is it still deductible for AMT?
How to prove that home equity loan taken is used to buy a home?
Best Solver (Answer):
Answer by Art Vandelay
You do not need to prove how you use the home equity loan funds. You can deduct the interest on up to a 100,000 home equity loan, whether you use it to buy cars, pay for college, or pay off credit cards, or buy another home with it.
Note that if the amount of the home equity loan and your existing first mortgate exceed the value of your home (don’t know anyone making these loans these days, but wanted to mention it), you can only deduct part of the interest of the home equity loan. But again, you are not likely to get 100% plus financing in today’s lending market.
For sure, though, talk to a tax advisor because these laws change now and then.Incoming Searches :Powered by Article Dashboard home improvement loans vs home equity | |