Did you ever get an answer? I have a similar situation. I did a cash-out refinance on my primary home a couple years ago. Used the proceeds for personal use. This year I converted the same primary home to a rental. So, same question: since the cash out for personal use happened before the home was converted to a rental, after it is converted is all the interest on the mortgage a deductible expense, or do I have to make an adjustment for the prior cash out?
This is all a timing issue...the IRS is VERY clear if you were to do this after a rental unit is place into service. Nothing on conversions where this occurs while your primary residence.
