Deducting Interest on Home-Improvement Loans
Since the tax reform act of 1986, one of the biggest deductions that a homeowner has is the interest on personal loans for fair credit secured by his residence. A new kitchen, bath or added space will add comfort to a home and improve its value. What’s more, if the home’s equity is used to pay for the improvements, the loan interest can likely be deducted, lowering taxable income. Hence, come April 15th, the bullet won’t be quite as tough to bite. Furthermore, don’t forget to save purchase receipts for all improvements. These dollars increase the basis of a home, lowering capital gains which can yield significant savings when it comes time to sell the old homestead. Three cheers for the red, white and blue! And that’s the On The House tip for today.