You make the callBy: National Association of Tax Professionals
July 30, 2020

Question: During 2020, Nate took out a home equity loan on his primary residence for $248,000 to purchase a second home. The loan is secured by his primary residence. Can Nate deduct the interest as qualified mortgage interest?

Answer: No, Nate would have to take out the loan to purchase the second home and have the loan secured by the second home to deduct it as qualified mortgage interest.

In this case, the home equity loan interest is not deductible regardless of its use. Regardless of when the indebtedness was incurred, you can only deduct the interest from a loan secured by your home to the extent the loan proceeds were used to buy, build or substantially improve your home.

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penAbout National Association of Tax Professionals

The National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.

The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.

Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.

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