V
vicky
Guest
We are just about to close on a small property. It is old and tiny but in an excellent location. The house is not worth much, it is all in the land. We got a good deal because we offered cash.
The plan with this small house is to rent it out for the next year. We will then use it as our homestead for another two years and sell our current house. Once we have enough cash, we will knock the whole thing down and have something decent build on it.
To finance this thing, we took a $108K home equity loan. This was less hassle than a mortgage, did not cost any fees/points and the interest was ok. I know this home equity line interest can be used as an itemized tax deduction but we usually barely go over that treshold.
Is there a way that the home equity loan interest can be used as an above-the-line deduction since we will be receiving rental income from the property for a year? Once we move in there ourselves, our current residence against we took the home equity loan will be paid off.
Does anybody have any experience with this?
Vicky
The plan with this small house is to rent it out for the next year. We will then use it as our homestead for another two years and sell our current house. Once we have enough cash, we will knock the whole thing down and have something decent build on it.
To finance this thing, we took a $108K home equity loan. This was less hassle than a mortgage, did not cost any fees/points and the interest was ok. I know this home equity line interest can be used as an itemized tax deduction but we usually barely go over that treshold.
Is there a way that the home equity loan interest can be used as an above-the-line deduction since we will be receiving rental income from the property for a year? Once we move in there ourselves, our current residence against we took the home equity loan will be paid off.
Does anybody have any experience with this?
Vicky