On Wed, 28 Jun 2000, Bryan Caplan wrote:
> William B Vogt wrote:
> > 3. Limitations on tax advantage. There is a pretty strict limit on how
> > much home equity interest can be deducted for non-home-improvement
> > reasons. My recollection is that, if you have more than $100K in
> > mortgage debt, then you can deduct $0 in non-home-improvement
> > related interest. Furthermore, people with small mortgages may not
> > even itemize on their returns, rendering the advantage void. So,
> > the relevant people are those with a mortgage big enough to make it
> > worth itemizing but small enough that the tax advantage exists.
> I've never heard of this. Does anyone know more?
Hmmmm. I seem to have misread the relevant publication. Here are links:
What I said before appears to be wrong. The limit on home equity debt is
$100,000 of home equity debt (there does not appear to be a strict limit
related to the total debt on the home). There is an
additional limit that all deductible debt must total <= fair market value
of the home. So, (the corrected version of) my point 3 is not going to
be relevant for much of anyone.
William B. Vogt Assistant Professor
H. John Heinz III School ph: (412) 268-1843
of Public Policy and Management fx: (412) 268-7902
Carnegie Mellon University [EMAIL PROTECTED]
Pittsburgh, PA 15213 [EMAIL PROTECTED]