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Home equity loans prior to Dec 2017 grandfathered in for interest dedcution?

Just-Lisa-Now-
Level 15
Level 15

Im only finding articles from the beginning of 2018, that says they are...I could have sworn I saw that it changed and all HELs are affected by the new rules and deducting interest.

Can someone please link me to something current?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Marc-TaxMan
Level 8

No

Starting 2018:  Only Home Equity Loans used to acquire / improve the residence.

NO grandfathering

View solution in original post

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19 Replies 19
Marc-TaxMan
Level 8

No

Starting 2018:  Only Home Equity Loans used to acquire / improve the residence.

NO grandfathering

View solution in original post

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Just-Lisa-Now-
Level 15
Level 15
So if you got a HEL back in 2005 and used it for whatever, since it didn't matter back then...now you need to go back and see how much was used over the years to improve the residence in order to decide how much is deductible?

That's how I understood it as well...but I cant find anything in writing anywhere!   I guess I can dig back through the book from the seminar I went to in Dec.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Just-Lisa-Now-
Level 15
Level 15
I'm arguing with my dad and he just keeps sending me all these links to articles published back last spring saying they are grandfathered in  LOL  He wont stop until I can show him otherwise!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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IRonMaN
Level 15
If your dad happens to be a barber I would listen to him because we all know that is the source of the best tax information :smile::smile:

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garman22
Level 12
Level 12
Bwahahaha!! Good luck with, Dad, Lis.....I have arguments with my mom like this....either that or throw up your hands and tell him to go to H&R Block!! *Shudders*
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Just-Lisa-Now-
Level 15
Level 15
My dad is retired and has nothing better to do all day than to research stuff  LOL  He and my mom don't even need to file a return anymore, I just mentioned to him about my current HEL situation and how it wasn't grandfathered in blah blah blah... and he hit the computer to prove me wrong!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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IRonMaN
Level 15
But dads and clients are never wrong :wink::wink:

Sign up here for pot stirring classes - 7:00pm Thursdays
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Just-Lisa-Now-
Level 15
Level 15
:joy::joy:

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Terry53029
Level 12
Level 12
see pub 936- 2018. It will tell you everything you need to know. https://www.irs.gov/publications/p936
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Just-Lisa-Now-
Level 15
Level 15
Thank you!  You rock!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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garman22
Level 12
Level 12
My Wife asks her mom to research stuff all the time as she is retired too. My MOM????? She is 80 and refers to her tablet as "her facebook"...."Michael, grab me my facebook"......."Michael, do google, that google is a smart one".......
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garman22
Level 12
Level 12
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George4Tacks
Level 15
Dad - When all else fails, read the IRS Instructions https://www.irs.gov/pub/irs-pdf/i1040sca.pdf page A-8
"Limit for loan proceeds not used to buy, build, or substantially improve your home. You can only deduct home mortgage interest to the extent that the loan proceeds from your home mortgage are used to buy, build, or substantially improve the home securing the loan ("qualifying debt"). Make sure to check the box on line 8 if you had one or more home mortgages in 2018 with an outstanding balance and you didn't use all of the loan proceeds to buy, build, or substantially improve the home. The only exception to this limit is for loans taken out on or before October 13, 1987; the loan proceeds for these loans are treated as having been used to buy, build, or substantially improve the home. See Pub. 936 for more information about loans taken out on or before October 13, 1987."
Sorry Dad, but you need a new barber

ex-AllStar
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Marc-TaxMan
Level 8
@Just Lisa Now! Of course if HELOC loan funds are traceable to a biz or rental activity, it's deductible there
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Just-Lisa-Now-
Level 15
Level 15
right, I was referring to residences  :+1::+1:

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Just-Lisa-Now-
Level 15
Level 15
"She is 80 and refers to her tablet as "her facebook"...."Michael, grab me my facebook"......."Michael, do google, that google is a smart one"....... "


LMAO!  I love her!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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garman22
Level 12
Level 12
:smile: She does say some funny things! I try to track them. Plus English is not her first language. She is Finnish.:smile:
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IRonMaN
Level 15
Then I'm guessing she is more a mojakka person than a lutefisk person.

Sign up here for pot stirring classes - 7:00pm Thursdays
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Just-Lisa-Now-
Level 15
Level 15
@Terry53029  if you convert your comment to an Answer, Ive give it a vote...IRonMaN can tell you how to cash in those votes!

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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