TCJA Individual Provisions

[Uncle Sam]

With all the CE programs taken so far this year on the Individual TCJA provisions - there are still 2 issues I have that have not been clarified - and perhaps if someone here can help, I'd greatly appreciate it.

Home Equity Interest - This is no longer deductible unless the funds were used for the residence. Ok. But as of what date is it no longer deductible - 2018 or 2019? Also, if a taxpayer has legitimate (under $ 100,000 principal) interest taken before the tax law change for funds not used for the residence, is it grandfathered and still deductible, or is it not deductible regardless of when taken?

Beneficiary losses from final year of 1041 - Since Miscellaneous Itemized deductions no longer exist, how do excess losses/deductions for a final year 1041 transferred to a beneficiary via K-1 handled? Are those deductions totally lost?

Thanks in advance for clarification.

[ATSMAN]

For existing equity loans the deductibility of interest is subject to the TCJA provisions in 2018. So you have to ask the question how the existing equity loan was used?

I am not 100% sure because I have seen conflicting talk that the 2% misc deduction on 1040 from a K-1 is lost. However the 2% deduction on a 1041 is still alive post TCJA.

[New York Enrolled Agent]

Home Equity Interest - This is no longer deductible unless the funds were used for the residence. Ok. But as of what date is it no longer deductible - 2018 or 2019? Also, if a taxpayer has legitimate (under $ 100,000 principal) interest taken before the tax law change for funds not used for the residence, is it grandfathered and still deductible, or is it not deductible regardless of when taken?

IRC §163 contains:

(i) In general. In the case of taxable years beginning after December 31, 2017, and before January 1, 2026 -

(I) Disallowance of home equity indebtedness interest. Subparagraph (A)(ii) shall not apply.

(II) Limitation on acquisition indebtedness. Subparagraph (B)(ii) shall be applied by substituting "$750,000 ($375,000" for "$1,000,000 ($500,000".

No exceptions - home equity indebtedness interest is gone for those tax years (unless of course, Congress changes the law).