My question is: US-specific QUESTION: we bought a townhouse as primary residence in xxxxxxxxxxxx, Maryland in July, 2004. in Sept 2005 we bought another single family house and moved into that (primary residence) and rented the townhouse. To buy the single family house we have taken HELOC (interest only loan) of 179,000$ at prime - .5% (till life of loan) and we are paying almost 1000$ per month towards HELOC. Question is do we get a tax break on the HELOC. What percentage of it do we get as tax break? --------------------------------------------------------------------------- david ingram replies: Any interest paid on the townhouse is deductible against the rent received. You would report both figures plus property taxes condo fees, management fees, repairs and anything else shown as a deductible expense on schedule E of your 1040. The interest on the HELOC (Home Equity Line Of Credit) is deductible under mortgage interest on schedule A of the 1040 and at $1,000 per month will certainly be a deduction along with any interest and property taxes on the townhouse until you rented it and property taxes on the new house for the balance of 2005. I cannot tell you what it will be worth. You have to give up about $7,000 of standard deductions to claim itemized deductions and then it depends on your tax bracket. At $20,000, you might save 15% and at $400,000 you could be saving over 40% counting state and federal and possibly city or county taxes which you will find in New York, the Bronx, Philadelphia and Grand Rapids, Michigan among others. ------------------ We will help prepare your federal and state income tax return or provincial returns. We do no online filing but will file the returns so that you can check the status online. We will do the 1040 or 1040NR or 1040X pr 1041 estate return, your Canadian T1 and in a pinch can help you look after a Mexican return as well with our Guadalajara consultant, David Holroyd. Whether it is help with specific or general information, filing, or just an estimate of the tax you will owe in a specific situation, we can calculate it for you. We can be the estimator for the tax equalization if you are being transferred from state to state or country to country. Our help is NOT free however. Typically, we charge $400 Cdn per hour for calculating, preparing or consultation service or services. We specialize in old returns so if you have not filed because of a bankruptcy or procrastination, we regularly do 10 years back for US / Canada citizens where the US citizen has failed to file while living in Canada. We can look after the TDF-90 and form 8891 RRSP reporting forms as well. 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