SecondAttempt
Thinks s/he gets paid by the post
I've got a few home improvemnet projects I intend to do over the first few years of retirement starting next year. Funding these is built into my retirement plan so I am not in a position where I need to borrow. But I am looking at options. Rates are low right now and it may make sense to borrow rather than spend cash.
My question for the experts really focuses on taxes. My understanding is that interest from either a HELOC or home equity loan is deductible if used for home improvement. So if I do a HELOC I basically get a checkbook that I can use to pay contractors or buy materials as I go, fairly simple to document using for home improvement.
But if I take out an equity loan I simply get the proceeds at the start. How do I document the use, possibly years later, for tax purposes?
The amount I am considering is modest, around $50,000 so probably not something that would catch anyone's attention. But I do try to be honest when it comes to taxes.
My question for the experts really focuses on taxes. My understanding is that interest from either a HELOC or home equity loan is deductible if used for home improvement. So if I do a HELOC I basically get a checkbook that I can use to pay contractors or buy materials as I go, fairly simple to document using for home improvement.
But if I take out an equity loan I simply get the proceeds at the start. How do I document the use, possibly years later, for tax purposes?
The amount I am considering is modest, around $50,000 so probably not something that would catch anyone's attention. But I do try to be honest when it comes to taxes.