Thank you so much for your detailed response @Carl
I started the refinance in June 2020 and hoping to use the cash-out money as a downpayment for an investment that closes in late October 2020. I was confident that the refinance would be done before the purchase but I was wrong. The refinance was not done until November 2020. I end up using my savings to make the downpayment for the purchase. However, I started the refinance 3 months earlier than the purchase and my intention is to use the cash-out refinance for this investment. Do you think I may still able to deduct the interest and fees against the rental?
If the answer is no, I am still planning to use the money to buy more rental. If I use 40K in December 2020, and 25K in March next year, how should I do the calculation for tax-deductible against the rental income? I am not sure how to prove it that I use the 65K cash-out money for investment purpose and how to handle the timing when calculating the deductible taxes. Thank you so much for your time!!
