I believe there are exceptions and that you can still allocate interest paid on expenditures to your rental property even if the loan was secured by your primary residence. I don’t think the answer that was given above researched the interest tracing rules or if the interest paid was used in a trade or business or to generate income .... as rental property is used to generate income. I was under the same impression at first but the more I researched various articles and consulted a CPA we both feel you can still allocate interest paid to an income producing property even if was secured on your primary residence.
