@Carl , in the other thread started by the same taxpayer, they say the personal residence had no outstanding mortgage prior to the new borrowing, and that all the cash from the new borrowing was used to pay off the mortgage on the commercial property.
I'm still not understanding.
1. If the taxpayer borrowed on a credit card to pay business expenses, the interest is a business expense even if the loan is not secured by the business, as long as the expenses are traceable. Why would that not apply to a loan that is secured by non-business property, as long as it is traceable.
2. Why is paying off one mortgage with another loan not a business expense? If the interest on the old mortgage was a business expense, why not the interest on the new loan, as long as the loan proceeds are traceable.
