Tax deduct of HELOC used to build new house?

I have a primary residence and a piece of land. I am considering taking out a HELOC against my primary residence of $250K and using that money to build a new primary residence on the land, at which point I will sell the current primary residence and move into the new house. My question is - can I deduct the interest on the full $250K HELOC (rather than just deducting 100K of HELOC interest) since the monies are being used to fund a new primary residence? I am weighing this against just refinancing my current primary residence and using those funds to build, but the costs are high for the load size and term (will only be 8 months).

Denverslim,

For mortgage interest to be deductable, typically the home must be used to secure it's debt. This is true for first or second homes where we can deduct mortgage interest.

How long did you own the land? If you have purchased the land and have not occupied the new residence within 24 months of purchase, the land would be considered an investment. The interest on the loan could be dedcuted as investment interest.

You should read these 2 IRS PUBs:
-Pub 936, Home Mortgage Interest Deduction.
-Pub 550, Investment Income Expenses.