I'm assuming I will have to create an amortization schedule for the rental property's portion to have my numbers to enter.
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None of the mortgage interest belongs to the rental ... you took a mortgage on your personal residence ( the reason is immaterial) so the interest belongs on ONLY the Sch A.
I was doing some research on this and it looks like I can only deduct what I used to pay of my primary home mortgage balance and any capital improvements to my primary home. The cash out to purchase the rental I can't deduct.
So with this said, I need to figure out what I've used for my primary home capital improvements to deduct each year going forward. Or am I wrong and I can write off the whole mortgage interested on this refinanced amount on my Schedule A each year going forward?
you cannot "deduct what you used" you can only deduct interest paid and that only if qualified.
Improvements to your home increase your cost basis.
You can only deduct interest on the amount you owed before the refinance . Example:
Original mortgage taken out in 2010 was for $80,000.
In 2019 you owed $60,000 on the property and refinanced for $100,000 with a " cash out" of $40,000.
You can only deduct interest on the first $60,000 of the refi. Since the $40K you cashed out was not used to maintain or improve the home refinanced, the interest on that is not deductible. Therefore only 60% of the interest reported on the 1098 is deductible.
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