Private Money Lending with HELOC

[Ammon Jensen]

I have been using a HELOC (8.3% interest rate) for Mortgage notes to make 10-12%. If am lending personally am I able to write off taxes from the interest from the HELOC, or would I only be able to do that with an LLC or S-corp?

[Michael Plaks]

Quote from @Ammon Jensen:

I have been using a HELOC (8.3% interest rate) for Mortgage notes to make 10-12%. If am lending personally am I able to write off taxes from the interest from the HELOC, or would I only be able to do that with an LLC or S-corp?

Short answer: no, not a direct offset.

Longer answer: if you already have enough itemized deductions to exceed the standard deduction, then yes. It's another itemized deduction called "investment interest."

Even longer answer: talk to an experienced accountant about potentially treating your lending as a business and structuring it along the lines of what you suggested. This is case-by-case and controversial.