Question:   Is interest on a home equity line of credit deductible as a second mortgage?

Answer:   You may deduct home equity debt interest, as an itemized deduction, if all the following conditions apply:

• You are legally liable to pay the interest
• You pay the interest in the tax year
• The debt is secured with your home
• The home equity debt is limited to the fair market value of the home reduced by home acquisition debt, up to a total of $100,000.