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Q. I’m planning to refinance our home to upgrade our pool and patio area. Can I still deduct the full amount of mortgage interest? L.P., Jupiter, Fla.
A. Probably. Normally, you can deduct the interest on a loan that refinances home acquisition debt of up to $1 million. Then you can generally deduct interest on up to another $100,000 of additional debt taken out in the refinancing under the home equity debt rule.
Tip: Not all home equity debt interest qualifies as deductible for alternative minimum tax (AMT) purposes. See a tax pro for AMT complications.