Financing Question

[mocpe]

I am considering a DVC purchase through a resller. If I finance this with a loan from my bank, is the inteest on the loan payments tax deductible?

 

[Richyams]

If you use the real estate interest in DVC as collatoral, that is called a real estate mortgage, under most circumstances, yes, it would be deductable.

If you took out a personal loan, it is not deductable.

If you used a second mortgage on your home, it would also be deductable.

"From each according to his ability, to each according to his needs", Karl Marx,This has failed every time it has been tried, why do we still have liberals?

 

[TnRobin]

Just a note:

Most banks will not use a timeshare as collateral in the loan, thus the loan interest is not deductible. As Rich pointed out, a home equity loan will meet the definition of a real estate loan (collateral is your house) thus the interest would be deeductible.

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<font size=4 color=blue font face="Comic Sans MS">Robin

 

[DVCDAVE]

Essentially Rich is correct. There are a limits on the deductability of interest. If the time share is declared as a second home, the mortgage loan on your first and second home combined do not exceed $1,000,000, or if you use a home equity line the max is $100,000. Further, you must itemize your deductions in order to qualify (but I assume you knew that already).

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