Allocation of Interest
The rules for deducting interest vary, depending on whether the loan proceeds are used for busi- ness, personal, or investment activities. If you use the proceeds of a loan for more than one type of expense, you must allocate the interest based on the use of the loan's proceeds.
Secured loan. The allocation of loan proceeds and the related interest is not generally affected by the use of property that secures the loan.
Interest You Can Deduct
Your trade or business interest expense may be limited. See the Instructions for Form 8990 for more information. Interest relates to your trade or business if you use the proceeds of the loan for a trade or business expense. It does not matter what type of property secures the loan.
