@inbb2b
I replied at your original location.
In reference to @JillS56 's question,
I believe you refinanced property A with the intent to purchase property B, but that never happened. In that event, if you use a portion of the remaining cash to improve property A, that will increase the percentage of deductible interest on the new loan. You don't have to worry about the tracing rules.
However, if you use the leftover cash from property A to now purchase or improve property C, D or E, that interest is legally deductible (a loan to improve property C does not have to be secured by property C), but whether you can actually survive an audit will depend on being able to clearly trace the interest expenditure on the loan against property A to an improvement of property C.
