How does doing a cashout refi or home equity loan affect AMT risk?
Tags:cashout, equity loan, first mortgage, risk,
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We will be remodeling/adding upon to the home as well as wish to do the cashout upon the initial debt (of around ,000) as well as afterwards do the 2nd (Equity loan) for the rest…does you do this put us during larger risk for carrying to compensate AMT taxes as well as if so, in what proceed (which lines in the 1040 or 6251 start this)? Is there the improved proceed you could take?
Related solution post:
- What are the risk linked to a home equity loan?
- Do I report Home Equity Loan as Income?
- My tax value on my home has increased. Should I refinance my first loan and add the home equity loan?
- Can I refinance a home equity loan if I've only had it a couple of months?
- if i take out a home equity loan now will this loan affect me if i want to refinance my mortgage.?
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.
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.