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Investors & landlords
If you will have only one mortgage on the personal residence that will also cover the rental then using the tracing rules you can still apply the rental portion of the interest to the rental.
For instance if the new mortgage was 40% used to pay off the rental mortgage then 40% of the interest can be applied to the Sch E and 60% to the Sch A... keep good records if the IRS comes asking for it.
‎September 16, 2020
5:11 AM