How to document HELOC closing cost if it's on primary but used for rental property?

[ajmoldovan]

Hi, we took out a HELOC against our primary in April 2019.  We are planning to take out partial amount to improve our rental property.  I am having a few questions regarding how to treat the costs related to the HELOC:

1. Partial loan amount will not be taken out within 30 days after the HELOC is closed.  Will this be a problem for IRS tracing purposes?  (The HELOC is against our primary but we would like to use it to improve our rental property.  Therefore, we would like to deduct any interest related to the HELOC as rental expenses in the future.)

2. How to treat the closing expenses related to the HELOC?  I understand that the closing cost needs to be added to the cost basis of A property.  Is it going to be my primary or my rental?  Is the guiding principle of documenting the closing cost of a HELOC the same as a primary mortgage?  For example, any fees paid to close the loan (application fee, appraisal fee, etc) of a primary mortgage is amortized based on the loan duration (i.e. 30 years).  However, other fees (attorney's fee, title search fee, etc) were added to the cost basis of the rental property (depreciated) over 27.5 years.  Can I do the same to the HELOC closing cost?

Thanks in advance for everyone's input!

[halpalms]

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/use-heloc-from-my-pri...

[ajmoldovan]

@halpalms , thank you for your reply.  I have read the linked post but it doesn't really answer both of my questions.  I am more interested to know:

1. Whether the 30-day tracing rule apply to me if the HELOC loan is taken out in April 2019 but the fund is not used for the rental property improvement until October 2019.

2. How to process the closing cost related to the HELOC?  Can I associate it with my primary or my rental property?

Thanks in advance for any insights you might share!