Home Equity Debt
This term refers to debt incurred on a principal residence or second home that is not used to buy, build, or substantially improve that residence or home. An example is a home equity loan used to acquire consumer products or pay off consumer debt. The portion of refinanced debt that exceeds the acquisition debt is also considered home equity debt. Interest on the first $100,000 of home equity debt is deductible as an itemized deduction for regular tax purposes but not for alternative minimum tax (AMT).
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