I have the same situation - cash out refinanced my primary residence in 2017, then later in 2017 converted it to a rental. I would like to get a clear statement specifically about the deductibility on Schedule E of interest on the portion of the loan that was used for personal purposes. As others have said the IRS guidance all refers to refinance after conversion, we refinanced before conversion. Wendy says to deduct the interest, but she never specifically addresses interest on the personal use portion of the loan proceeds.. Is anyone willing to clarify the rules here, please? Or is it a matter for the tax court to decide?
