However, the refinance took more than 5 months to close, which is 3 weeks after I closed my rental purchase.
That indicates to me that not one single penny of the cash out was used to purchase the rental property. Therefore nothing is deductible against the rental. But maybe there's something about the transaction you're not telling us?
can I still claim the interest and closing cost from the refinance as the expense for my investment property?
Based solely in the information provided, the unfortunate answer is no. Like I said, maybe there are some details you left out?
My primary house before refinance had a balance of 90K, I took out 65K and the new balance after refinance is 162K.
Since your balance before refinance was 90K, that's 55% of the refi. Therefore 55% of your interest is a SCH A itemized deduction against the primary residence, every year until paid off.
Since I cashed 65K I am planning to use the 25K to purchase another investment in the near future.
That $25K would be 6.5% of the total refi amount. Therefore 6.5% of the interest paid every year would be a SCH E deduction.
