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Richard
Richard, Tax Attorney
Category: Tax
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Experience:  29 years of experience as a tax, real estate, and business attorney.
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Can loan out on a rental property to buy a primary residence

Customer Question

can loan out on a rental property to buy a primary residence and claim the interest on the loan
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I own a rental house worth 1.3 m mortgage is paid off. I would like to borrow 500k on it to buy a primary residence. Can I claim the interest on the 500k loan
JA: Is there anything else important you think the Accountant should know?
Customer: no
Submitted: 1 month ago.
Category: Tax
Expert:  Richard replied 1 month ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 1 month ago.

Yes, absolutely. This would be a legitimate interest deduction on your schedule E on which you report the operations regarding your rental property. This wouldn't be deductible on Schedule A as mortgage interest on your principal residence, but it would be mortgage interest on your rental property and thus deductible.

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