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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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in considering buying a used vehicle, a home equity loan for

Resolved Question:

in considering buying a used vehicle, a home equity loan for an interest rate of about 2.99 percent verses a car loan which is 2.35 percent, which one would be more advantageous tax wise?
Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

With a home equity loan, you can deduct interest for up to $100,000 if the amount is not used to improve the property

MyVirtualCPA :

So, as long as your car was less than $100,000 and you don't have other existing equity loans that were not used to improve your residence you could deduct the interest

MyVirtualCPA :

You cannot deduct the interest on a car loan

MyVirtualCPA :

So, from a tax perspective, it is advantageous to get the home equity loan.

MyVirtualCPA :

Is there anything else I can assist you with? IF not, please rate my response as "excellent" so that I may receive credit for assisting you today. Thanks again for using JustAnswer.com

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
nothing is deductible for a car loan? and the small difference in rate means we should go with the best rate or go where we can get a tax advantage?
Expert:  Megan C replied 1 year ago.
Nothing is deductible for a car loan. You would get the tax advantage going with an equity loan from your house. You should shop around for your best rates.

Please let me know if you need anything additional. If not, please rate my response "excellent" so that I may receive credit for assisting you today.

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