Leicester, MA · Member since 2016 · 137 posts · 36 votes
Our primary residence is 100% under my wife's name. Would the interest be tax deductible if she pulls equity out via line of credit or 2nd mortgage then provides me with a personal loan with a set interest rate? If not then would the interest rate of the 2nd mortgage/line of credit be tax deductible?
I am pretty sure that the interest on the line of credit would be deductible (Sched A) if it is backed by her home.
If she took that cash and loaned it to you (and you had a document stating the terms), and you used that money for your business (or real estate), that loan interest that you pay her would be deductible to you (Sched C or E) , however it would be recorded as INCOME for her (Sched B), so if you are in the same tax bracket it would wash out.