rbynaker
Level 13
01-19-2021
01:23 PM
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Ignore the bank terminology. The bank doesn't care (or usually know) what the money is used for. The IRS doesn't care if acquisition debt came from a first mortgage, a second mortgage, a HELOC or whatever name the lender comes up with.
Loan proceeds that can be traced to expenditures to buy, build or substantially improve the residence are considered home acquisition indebtedness (assuming they are secured by such residence).