Is interest on a HELOC still deductible under the new tax law?
I'm paying on a home equity line of credit (HELOC) that started back in 2007. The house has now been demolished due to a fire. The draw period is over and I am locked into a fixed payoff period now for 15 years. Is this interest still deductible under the new tax law?
Based on what you have stated, your interest should still be deductible under the new tax law. Whether second mortgage interest is deductible is highly dependent on your individual circumstances, and many are confused by the new rules (as they are honestly quite confusing). You will want to consult your tax adviser before taking the deduction. And since the new law even confuses many tax advisers, you may want a second opinion from another financial professional who is familiar with your specific circumstances.
Why Your Interest Is Likely Deductible
The new tax law included a grandfather provision for HELOCS taken out prior to the start date. It sounds like this is the case with you, however, I would want a tax adviser to look at the details of when the loan was locked-into a 15-year installment loan to be sure. As a change in the terms of the loan could actually be considered a new loan and eliminate the grandfathering.
Even if the grandfathering was eliminated, You may still be able to deduct the interest under certain circumstances. Again, checking with a tax adviser is advised.