How does a withdrawal Refi or Home Equity Loan TN affect the risk?

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We are remodeling / adding on our home page and want to have money in the first mortgage (approximately $ 60,000) and second (equity loans) for the rest … We share a greater risk for them to pay tax and AMT if so how (which affect the 1040 or 6251 lines inside)? Is there a better approach we could take?

  1. Reply
    February 11, 2011 at 11:42 pm

    you will not be taxed on any loan amounts…if you hold that money in the bank, the interest it may earn is taxable though.

    a loan is not income….you have to pay it back….it will not become income even if you buy a car with it. but if you buy a car with it, the interest you pay on it is not deductable.

  2. Reply
    v b
    February 12, 2011 at 12:38 am

    The risk is that you must keep very careful track of your loans. Any money from a refi/2nd that *isn’t* used to improve your home is added back to your income for AMT purposes.

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