If I do a cash out refi on Investment Property 1 to pay off Investment Property 2, will the big mortgage be all tax deductible?

Assuming the investment property is residential rental real estate, then yes.

The amount refi'd on property A is claimed against property A. The amount used to pay off property B is claimed against property B.

Do be aware that this will complicate things just a bit if you sell one of the properties before the loan is paid off.

Are the properties being held for rental (business) use?

Yes both are residential rental properties. 

Thanks but when it comes time to file, I would only get 1 mortgage interest statement with 1 amount so how would that be split up? Do I just get the percentage at time of cash out refi and apply the same percentage for mortgage interest? And does the rule of using the extra funds to buy, build, improve not applicable? Thank you.

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@Tpnkd1314 wrote:

And does the rule of using the extra funds to buy, build, improve not applicable? Thank you.

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Yes, the rule is still applicable if you borrowed funds in addition to the original balances of your loans.