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Rajan A

Is the interest on $200k home equity loan used to buy a new primary residence deductible on Sch A.?

asked by Rajan A

We are planning to rent our existing home and pull $200k equity from that home to buy a new primary residence. I am not clear about the $100k deductible limit on the home-equity loans. Can I deduct it on Sch A or against the rental income and is the deductible equity loan capped at $100k. We file married jointly and our AGI is $160k.

Landlord

Best Answer by Landlord

The loan is on the rental property, stupid move, as now you have full capital gains tax, but that is not your question. The interest is not applied to your primary home, but to your rental.

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