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)?
02562
2 Replies
Carl
Level 15
Mar 28, 2021 5:48:49 PM
Yes, you can deduct the interest on SCH E. Tracing rules apply.
See IRS Publication 535 Chapter 4 here for details and requirements.
KrisD15
Expert Alumni
Mar 28, 2021 5:54:29 PM
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)