Here is the situation: Home equity line is for $350,000. During the course of the tax year, the amount borrowed on the line varied from $0 to $300,000 (basically increasing as the year went on during the course of a remodel). The entire amount is attributable to home remodel. I know that the maximum amount of $100,000 applies to this line, but I'm having trouble figuring out how to prorate the yearly interest based on this. I mean, if it was a fixed loan for $300,000 I would just divide the yearly interest by 3, but here we have a situation where the amount borrowed actually varied throughout the year. How exactly am I supposed to prorate it? Should I just take the average of the starting and ending amounts of the line (0 and $300,000) and divide by 2 to estimate the average balance for the year, or do I need to go in by monthly statements (none of which I still have)?
Thanks in advance
- posted 11 years ago