New tax law on HELOC

[Jennifer Van vlymen]

Looking for answers about HELOC

live in California

With the new tax law in 2019

My husband and I have enough equity in our house to pull out a HELOC was wondering if it's still taxable if we use it towards the purchase of a property investment we already have a property investment but that was bought in 2018 are we allowed to write off the interest on a new investment in 2019?

[Michael Plaks]

@Jennifer Van vlymen

If you use HELOC towards a purchase of a new investment property, it is still fully deductible against that new property. The new law has nothing to do with it, it only changed the rules for NON-investment HELOC.

It's critical, however, to not use this HELOC for anything else and have a clean paper trail showing that the proceeds went to a separate account and from there directly towards the closing on the new property.