How to deduct the interest expense of borrowing HELOC as a business interest expense?
by tracey, Window Shopper
- Created: July 27, 2009, 1:29 pm
John and Beth Harris start a LLC. John has an HELOC of $150,000 under his name secured by their main home. He has not taken out any proceed from the HELOC yet and now he wants to take the entire proceed out and use it for their new LLC for business use only.
In this situation, how does John report the interest expense of borrowing the HELOC as a business interest expense? Can John just take out the $150,000 proceed and transfer the amount to the LL;s account, and then let the LLC make the monthly payment from its account and deduct the interest as a business interest expense on schedule C?
Can someone please help?
Thank you very much for reading.
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