The interest paid on that home equity loan may still be tax deductible, in some cases.

Many taxpayers had feared that the new tax law — the Tax Cuts and Jobs Act of 2017, enacted in December — was the death knell for deducting interest from home equity loans and lines of credit. The loans are based on the equity in your home, and are secured by the property. (Home equity is the difference between what the house is worth and what you owe on your mortgage.)

But the Internal Revenue Service, saying it was responding to “many questions received from taxpayers and tax professionals,” recently issued an advisory. According to the advisory, the new tax law suspends the deduction for home equity interest from 2018 to 2026 — unless the loan is used to “buy, build or substantially improve” the home that secures the loan.

The article is written by Ann Carrns for NY Times. You can read the full article here.