Use HELOC from my primary house to buy a rental property. Shall I deduct the HELOC interest as primary home mortgage interest or as expense for the rental property?

[Mwillsen]

What would you say if I used a heloc secured by my primary residence to add an addition with includes an attached rental ADU? Seems like a grey area. Thanks

[LeonardS]

Yes, Interest on Home Equity Line of Credit (HELOC) debt is tax-deductible if you use the funds for renovations to your home; “buy, build, or substantially improve". What’s more, you must spend the money on the property in which the equity is the source of the loan. If you meet the conditions, then interest is deductible on a loan of up to $750,000 ($375,000 or more for a married taxpayer filing a separate return).

@Mwillsen