Is all interest on home loans tax-deductible?
I don’t know.
Several weeks ago, I wrote a post, based on an article in the Boston Herald:
[I]f you took out a new loan so you could free-up some cash, getting what’s known as a “cash-out refiâ€?, and ended up using that money to pay down your credit card debt, take a vacation, or invest in cattle futures, you can’t.
Only if you use the money for home improvements, can you deduct the interest paid.
But, I just read this, in a Boston Globe article:
DEAR BOB: We just refinanced our condo, receiving part of our equity in cash. Is the money we received taxable? –Sheila D.
DEAR SHEILA: No. When you refinance your mortgage and take out all or part of your home equity in cash (called a “cash-out refinance”) you owe zero tax on that cash. It is tax-free for you to spend as you wish.
Hmm. I need to look into this. I had always assumed you could deduct the interest, no matter what, until I read that article in the Herald.
Not sure now.
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