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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1249
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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If I purchase an investment property (to rent out) and pay

Resolved Question:

If I purchase an investment property (to rent out) and pay for it with cash that I obtain from taking a new mortgage on my personal property (a condo that's currently paid off), is the mortgage interest a deductible business expense?
Or would this only work if the mortgage was on the actual rental property?
Submitted: 6 years ago.
Category: Tax
Expert:  Mark D replied 6 years ago.

Interest claimed on Schedule E (rental activity) does not need to be secured by the rental property. However, you must be able to show (if audited) that the borrowed monies were used on the rental property for the rental activity. Please let me know if you have further questions.


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