Q. I occasionally use a light truck for business. I’ll probably buy a new truck in 2008. Should I use a home equity loan to borrow the money I need? J.R., Bala Cynwyd, PA
A. It probably makes sense tax-wise. Because you use the truck minimally for business, you wouldn’t have your business take out the loan. If you did, you may be taxed on the personal use of the truck. By taking out a home equity loan instead, you can deduct the interest paid on the first $100,000 of debt. So you can claim mortgage interest on your personal return regardless of how the truck is used. (However, if you’re subject to the AMT, all or part of your interest deduction will be lost.)
Tip: Be mindful that such a loan is secured by your principal residence. If this could cause a problem, you might forgo the tax benefits.
- Small Business Tax Deduction Strategies No matches