Rules You May Not Know About When You Use Your Home As An ATM

Using a home as an ATM

The state of California recently reviewed a sample of state tax returns which claimed large mortgage interest deductions and found that 75% of the tax returns had claimed excessive interest deductions. There are rules that limit how much interest you can deduct for your mortgage and other monies borrowed against your house. However, historically, only the extremely wealthy would run up against these rules. Today with so much home equity, particularly in some of the more expensive coastal areas, many people are running afoul of the rules and don’t even realize it.

Most notable is that you can only deduct the interest on the first $100,000 that you borrow against your house for things

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