Can mortgage Interest from a 2nd mortgage on a home be applied to a rental property?

TouristTrophy · ‎April 13, 2020

We got a 2nd mortgage on our home to partially pay for an investment rental property. The address for the loan paperwork is for our home. Can we deduct the mortgage interest for our rental property? Thanks.

MarilynG1 · ‎April 13, 2020

Yes, you can deduct the % of Mortgage Interest that applies to your Rental Property as a rental expense.

You should keep documentation of how you calculated this amount.

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TouristTrophy · ‎April 13, 2020

Thanks for the quick reply and answer. Since we used 100% of the proceeds from the 2nd towards the purchase of the rental property, then would that mean that 100% of the mortgage interest would be deductible for the rental property? Thanks, again.

MarilynG1 · ‎April 13, 2020

Yes!

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Carl · ‎April 13, 2020

Make sure you keep all documentation in case you're ever audited in the future. If that happens, you'll have to "prove" you used that money for the rental property purhcase. So a paper trail is a must.

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Can mortgage Interest from a 2nd mortgage on a home be applied to a rental property?