Can I deduct interest on a HELOC secured by my main home, and where 100% borrowed funds were used for restoring my second home, which is now full time rented (20% of year 2020)?

FLORIDABOY1 · ‎March 28, 2021

Carl · ‎March 28, 2021

Yes, you can deduct the interest on SCH E. Tracing rules apply.

See IRS Publication 535 Chapter 4 here for details and requirements.

KrisD15 · ‎March 28, 2021

No, not as home mortgage interest but Yes as interest expense on the rental.

The expenses would only be claimed for the time after it became a rental (was ready to be rented)

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