What is a home equity loan?

Within the context of deductible interest expenses (where you are itemizing your deductions, rather than taking the standard deduction), a home equity loan is any mortgage taken out after October 13, 1987 and which was used for anything other than to buy, build or improve your primary residence or a second home. You can generally deduct interest related to such a loan if the loan is for less than whichever of these amounts is smaller: (i) $100,000 (or $50,000 if you are married and filing separately); or (ii) the fair market value of your principal residence and any second home, less the amount of any home acquisition debt or grandfather debt.