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Can loan out on a rental property to buy a primary residence

Customer Question
and claim the interest on...
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 year ago.Category: Tax
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10/29/2016
Tax Professional: Richard, Tax Attorney replied 1 year ago
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55,801
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Tax Professional: Richard, Tax Attorney replied 1 year 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.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (hopefully Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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