I bought rental properties B and C using the proceeds from a mortgage on rental property A. The tracing rules state that I need to report the interest on Schedule E based on how the proceeds of the mortgage were used (so I would report the interest as being used for properties B and C since that was how the funds were used). What is the best way to do this? Would I report the interest on the 1098 for property A as 2 1098s for properties B and C (or would I state that the interest I'm claiming on Properties B and C did not appear on a 1098)? Thank you in advance for your response.
