Principal, Tax, KPMG LLP
Jun 27, 2018
From the KPMG TaxWatch
On Dec. 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act, Pub. L. No. 115-97, was signed into law. The new law includes substantial changes to the taxation of individuals and businesses of all sizes. Among these changes, certain aspects of an individual’s deduction for home equity interest have been temporarily modified. For tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, an individual’s deduction for qualified residence interest expense has been amended to disallow a deduction for interest on ‘‘home equity indebtedness.’’ However, when it comes to home equity lending and borrowing, there is more than meets the eye for purposes of this deduction. ‘‘Home equity indebtedness’’ is a specifically defined term, and to the extent certain criteria are met, a taxpayer may still be able to deduct interest paid on a home equity loan, home equity line of credit, second mortgage, or similar product.
Read this article, originally published on Bloomberg BNA, that details more about home equity interest under the new tax law.