Can interest from my primary residence loan refinance be deducted as expenses against a rental property that the loan was used to purchase?

[tannoman]

I refinanced my residence and used some of the cash to purchase a rental property.

I understand I can deduct interest against my primary residence, but only so far as that interest was used to pay off my prior loan on my primary residence.

Can the rest of the interest costs be expensed against my rental property?

If not, would it make sense to get a separate loan for the rental property so the interest can be expensed against it?

[Mike9241]

yes but there are some caveats.

say the total refi was $100 and the old loan of $70 was paid off. 

so far only 70/100 of the interest would be schedule A 

it took you 4 months after the refi to close on the rental 

the interest on 30/100 during this period is not deductible.

if the 30% can be traced to the purchase of the rental then starting with the closing date the interest would go on schedule E. Warning if that $30K was used for something else between the time of the refi and purchase of the rental, deductibility would be in jeopardy.