What Is Home Equity Line

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Q. Under what circumstances, if any, is the interest from a home equity LINE of credit deductible?

A. I suspect a some lenders lend out funds saying that the interest is deductible as a home equity line from a marketing standpoint. I would think that that means the line"IS" secured by one's residence and not merely that it "could be secured". I would think that if the loan had not in fact been recorded consistent with the filing requirements in your state that an IRS auditor could take the viewpoint that the loan was in fact NOT secured by the property and to disallow the interest deduction. I've seem some marketing for credit cards "secured" by ones home as being deductible. I'm sure the point has come up before and that someone can give a factual answer rather than my in the dark shot? On the flip side, that means you can be putting your home at risk for loans where ordinarily the lender would have very limited recovery options. One article on point was titled " A house for a blouse"

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