Ok, so I’m thinking this is going to be a no...but wanted to ask. We were hit hard last year with 13k in foundation repairs and then our septic field failed and we had to spend 12k to change our plumbing in order to connect to the city sewer plus the city connect fee. We used a 0% loan for the foundation work and when it came due I used our HELOC to pay it off to avoid the massive interest charges that would hit.
IRS.GOV: The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.
My first question is...will I be able to deduct the HELOC interest for the foundation work? It seems a bit sketchy since I had the 0% loan first instead of paying the company directly with the HELOC.
Second question, would the foundation and sewer work even fall under ‘substantially improve’ in the IRS’s eyes?