Interest expense

[woodsd_1]

I have an LLC that flipped a house in 2019.  I used a HELOC from my personal residence to finance the flip.  I assume I record the sale on schedule C (plan to do more) and record the full cost of the rehab under purchases (as opposed to COGS with inventory).  However, am I able to include the interest expense from the HELOC?  If so, does it also get listed under purchases?

[KathrynG3]

No. To include the interest expense from the HELOC, it must be secured by the investment property.

Click the link for additional details on flipping houses and how to report it for tax purposes.

[AmeliesUncle]

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@KathrynG3 wrote:

No. To include the interest expense from the HELOC, it must be secured by the investment property.

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There is no requirement that it be secured by the property.  The interest *IS* deductible.

[woodsd_1]

I've had two conflicting answers

[woodsd_1]

which answer is correct

[DeanM15]

If you have a Schedule C business that buys and renovates homes, and then sells then for profit, yes you can deduct the interest from a business loan.

If the HELOC loan was used totally for the business then the interest is completely deductible. If the loan was only used partially for business then you must split off the personal part and only deduct the business interest. 

This is a distinct question about deductibility on a Schedule C, not about deductibility on a Schedule A.