As you describe the transaction, you wouldn't be able to deduct this interest.
The money you borrowed was secured by stock holdings, not by the real estate you purchased. In order to deduct as mortgage interest, the "loan" would have had to be a mortgage , i.e.secured by the condo.
You described the condo as a "2nd home", i.e. a personal residence. If you borrow money to finance investments, the interest you pay is considered investment interest. Examples include margin interest your broker charges you on loans to buy stocks, and interest you pay on money you borrowed to buy raw land for speculation. If you have investment interest expense, you can deduct it up to the amount of your net investment income. A "2nd home" does not qualify as an investment (we all know it might turn out that way, but on its face it is not).
Do I qualify for the investment interest expense deduction?
Eligibility requirements
- You must be an investor who borrows money to buy investments, and receives interest, dividends, capital gains, royalties, or other investment income.
- You must itemize your deductions on Schedule A.
