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Hot Tax Tip — HELOC (Home Equity Line of Credit)

Under the new tax laws (which went into effect in 2018), interest paid on home equity line of credit (HELOC) funds is only deductible if the HELOC funds are used to buy, build or substantially improve the taxpayer’s home that secures the HELOC.

 

As such, if you use HELOC funds to pay for tuition, a vacation, or other expenses not related to improving the home (as has been the case for years prior to the change), you cannot deduct the interest paid on the HELOC.

 

This change is set to expire after 2025 — which means, beginning in 2026, that you’ll again be able to deduct interest paid on HELOC funds, no matter how you use the funds (unless Congress makes the change permanent before then).  Cabo San Lucas 2026 anyone?

 

If you have any questions, IAG Forensics and Valuation is here to help!  Please contact Dan Branch — 770-635-1582 or dan@iagforensics.com.

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Dan Branch

Dan Branch is a graduate of the U.S. Naval Academy, has an MBA from Emory University’s Goizueta Business School, is a Certified Public Accountant (CPA), holds the Accredited in Business Valuation (ABV) certification from the AICPA, and also holds the Accredited Senior Appraiser (ASA) designation in business valuation from the American Society of Appraisers, and has over fifteen years experience in various types of financial advisory and business valuation engagements.

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