Are you planning to take out money from your home to start a business, buy a rental, or fund other investments? If you answered “yes”, do you know that you cannot deduct the interest portion as part of your home mortgage interest? So, what do you do then?
Hello, this is Noel Dalmacio, your ultimate CPA at LowerMyTaxNow.
With the complete loss of the home equity line of credit debt (HELOC) and the reduction in mortgage debt for tax year 2018, you have to structure your loan by using the “interest tracing” rule. Interest tracing will allow you to deduct the interest portion of the loan proceeds that you used from your home mortgage debt to start your business or fund other investments.
Here are three things you need to know about “interest tracing”:
There you have it. Those are the three things you need to know about the new mortgage interest deduction.
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Until then, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow.com.