Question

Can I deduct the interest I paid on a HELOC loan to purchase a second home, in which I live 6 months a year? The IRS says yes. Turbotax says it's NO. Why the difference?

Forum|Forum|1 year ago
February 17, 2025
1 reply
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Turbotax also allowed me to take this deduction last year. I can't find anything that says this deduction is no longer allowed.

V

Vanessa A

No, you cannot deduct the interest on the HELOC you used to purchase a second home. The reason is because in order to deduct the interest you must have used the loan to buy, build or substantially improve the home in which secures the loan. Since you used the loan for another home, it does not qualify.

Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. Pub 936

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