Cash out refinance on investment property to pay off vacation house

[mikeodonn]

Last year I refinanced my investment property (two unit townhouse) and used the cash to pay off the loan on my vacation house.  I have been told that I can still take the full interest payment on the new loan as a business expense against rental income for the investment property.  What do you think? 

[DavidD66 · Accepted solution]

Yes, you can deduct the full amount of interest on your rental property as a rental expense. 

[mikeodonn]

Thanks, David.  It is odd that a large part of the loan on the property was used for something that had nothing to do with the business.  But very glad to hear that the whole thing can be deducted.  Thanks again. Mike