A ‘dead’ home-equity tax deduction sees new life due to IRS

President Trump’s new tax law has caused concern among homeowners looking to borrow against the equity in their houses.

The legislation appeared to eliminate the deduction taxpayers get for the interest owed on home-equity loans, but after prodding from lobbying groups, the IRS has clarified that borrowers could still use the deduction – as long as it’s for home improvements.

The IRS guidance on home-equity debt is just the latest example of the agency’s cleanup effort in the wake of the hastily passed law. Various industries and tax professionals are still struggling to understand its provisions and interpret lawmakers’ intentions on changes, including the pass-through deduction and international tax measures.

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Written By: Joe Light

Published By: Bloomberg News and www.financial-planning.com

March 26, 2018 In: Current Affairs, Financial Articles Comments (None)