Allocation of repayment on mortgage used to purchase multiple properties
I used some of the money from a refinance of the mortgage on rental property A to buy rental property B. So based on the tracing rules I need to allocate the mortgage interest between rental property A and rental property B. I have been allocating the repayment to rental property B since it is the smaller loan so it can be paid off sooner which will simplify things. Would this procedure be acceptable to the IRS? Thank you.
01695
1 Best answer
KrisD15
Expert Alumni
Apr 10, 2023 6:11:08 PM
Yes, as long as you are allocating the interest, the repayment needn't be done in any required order.
Be sure to keep records with your tax file.
1 Replies
KrisD15
Expert Alumni
Apr 10, 2023 6:11:08 PM
Yes, as long as you are allocating the interest, the repayment needn't be done in any required order.