FREQUENTLY ASKED QUESTIONS (FAQS) continued

Q. Is interest on a home equity line of credit deductible as a second mortgage?

A: You may deduct home equity debt interest, as an itemized deduction, if all the following conditions apply:

• You are legally liable to pay the interest
• You pay the interest in the tax year
• The debt is secured with your home

You do not exceed certain limitations

Q. Is the mortgage interest and property tax on a second residence deductible?

A. The mortgage interest on a second home which you use as a residence for some portion of the taxable year is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence.

• Real estate taxes paid on your primary and second residence are, generally, deductible.
• Deductible real estate taxes include any state, local, or foreign taxes on real property levied for the general public welfare.
• Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property.

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