- Is the interest on loans A, B, and C all fully deductible as rental/investment expenses? Yes on Schedule E
- If loan A were taken against my home instead of a rental property, is the mortgage interest on loan A still deductible as a rental/investment expense? yes, but only on Schedule E. You can not deduct the interest on schedule A, even if you later sell the rental properties and maintain the debt.
- Do I capitalize the loanexpensesfor loan A on a pro-rata basis between properties 2 and 3 (i.e. 30% toward the cost basis of prop. 2 and 70% toward prop. 3)? Not sure what you mean by 'capitalize' the expenses. you simply report the interest expense on Schedule E. What loan expenses are you refering to?
‎December 7, 2022
3:22 AM
