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If I borrow $90,000 on a home equity line of credit with an APR of 5%, and loan the money out at 7%, can I deduct the 5% for tax purposes?

Submitted: 17 days and 5 hours ago.

Category: Tax

Value: $30

Status: CLOSED

State/Country relating to question: United States

Accepted Answer

Hello Erik,

Yes, you can deduct mortgage interest that you pay on a home equity line of credit up to a loan of $100,000 in principal. However, at the same time, you would have to report the interest income you are receiving on the loan that you will be making, as this is taxable income to you.

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Thank you Erik and let me know if you have more questions.

Accepts:
Expert:	Merlo
Pos. Feedback:	99.8 %
Answered:	11/5/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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If I borrow $90,000 on a home equity line of credit with an APR of 5%, and loan the money out at 7%, can I deduct the 5% for tax purposes?

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If I borrow $90,000 on a home equity line of credit with an APR of 5%, and loan the money out at 7%, can I deduct the 5% for tax purposes?

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State/Country relating to question: United States

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