What are the interest deductibility guidelines?
For an interest expense to be deductible, the interest expense must be paid or payable on borrowed money that is used for the purpose of earning income from a business or property. Interest is not deductible if the borrowed money is used to purchase items such as a home, personal car, or vacation as these items do not yield income from a business or property. However, you may be eligible to deduct a portion of the interest expense on your mortgage if you maintain a home office or on a car loan if you use your car for business or employment purposes. In short, if taxpayers can demonstrate that borrowed funds can be linked to an income-producing use, the interest is deductible. Contact your professional advisor to discuss whether or not your interest expense is deductible.
