Originally Posted by guttedmiata
Due to a divorce, we were forced to sell our house for less than the loan balance. My ex secured a loan to pay the difference. I have a promissory note with her to pay half of that amount. I pay it directly to her. Is there a way to deduct the interest on my taxes since it's not mortgage interest but is related to a home loan?
I gtuess it depends.The interest you pay toward certain types of loans may be tax deductible, The interest you pay on your mortgage for a first or second home is typically tax deductible.. but interest paid toward personal loans is not tax deductible. Personal loans are loans made where no property is used as collateral for the loan, and money can be spent at the discretion of the borrower. When you take out a personal loan, you can spend the funds on anything you want; the IRS states that you cannot deduct personal interest from your income taxes. In addition, the interest rates on personal loans are typically higher than the rates charged on secured loans like mortgages.