Using HELOC on primary residency for investing

[Manish Shah]

I read many places about investors using HELOC on primary residency to buy investment property. Here is my question. The interest on investment loan is a valid expense that you can take out from your income for tax purpose.

When you use the funds from HELOC, how will you get this tax benefit? HELOC interest in normally tax deductible but there are many limitations when you have high level of income and the tax benefit get reduced. (for example - if you have itemized deduction of say 30,000, you may be allowed to take only 25,000).

Has anybody experience this issue and is there a solution for this problem? Is it possible to pass the entire interest as a valid investment expense?

[Rosston Smith]

Chris Mason said it best! Yes, your HELOC is used for the down payment.