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- Deduct mortgage interest for loan used in rental (secured from priciple home)
Deduct mortgage interest for loan used in rental (secured from priciple home)
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skyworks
Level 5
06-18-2020
10:50 AM
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Pricipal home original loan back in 2013, remaining balance is about $800K in 2019.
Refinanced in 2019 to about $1M with cash out $200k to purchase rental property.
My understanding is that the loan dated from 2013, so $1M rule apples, interest from $800k can be deduct on Sch A.
Interest arrived from $200k (excess of $800K) loan can be allocated to rental property?
According Pub 535: In general, you allocate interest on a loan the
same way you allocate the loan proceeds. You
allocate loan proceeds by tracing disbursements to specific uses
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1 Comment 1
TaxGuyBill
Level 15
06-18-2020
10:27 PM
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Yes and yes.
