Question by : Is the cash out of a mortgage refinance taxable?
I am buying a foreclosure and refinancing to pull cash out to update the house. I will be under the current appraised value but I am worried about tax ramifications when pulling out the refinance money because I have not owned the house 2 years.
Any help would be great. Thx
Best answer:
Answer by v b
Only if you don’t pay it back.
The interest related to this money is added back for AMT purposes.
Add your own answer in the comments!
Dear CL: No tax reporting for the money pulled out and the mortgage interest is tax deductible with certain limits. There is a limit of $ 1,000,000 acquisition debt and $ 100,000 limit for home equity. There is no 2 year factor that I am aware of with regard to home ownership.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor