Say I buy a house with an attached ADU and finance it with 1 million loan and say ADU takes 25% of sqfootage and primary residence ( "main home" ) takes 75% of sqfootage. Clearly debt allocated for primary home and ADU is 750K and 25) respectively. Now, when I file my taxes next year, interest too gets divided in the same ratio and all the interest paid for ADU portion would show up in schedule E (assuming I am renting out the ADU).
But how about debt repayment. Say, I paid off 30K of principal. Would that entire 30K gets count towards paying the debt on primary residence ("main home")?
At least that is my understanding from debt repayment rules in 1.163-8T
