I used the letter of credit from my rental property to build my personal residence. None of the money was used for the rental property. Where do I deduct the interest?
Unfortunately you lost a deduction..
Because the LOC is on a rental property, it does not qualify as home mortgage interest .For you to take a home mortgage interest deduction, your debt must be secured by a qualified home.
Also, If the LOC was used for personal purposes, it is not deductible against rental income.
The Internal Revenue Service states you can only write off interest that is related to your rental property activities.
The only way that you can deduct interest on personal-use funds is to take the loan out against your home instead of your investment property.
Unfortunately you lost a deduction..
Because the LOC is on a rental property, it does not qualify as home mortgage interest .For you to take a home mortgage interest deduction, your debt must be secured by a qualified home.
Also, If the LOC was used for personal purposes, it is not deductible against rental income.
The Internal Revenue Service states you can only write off interest that is related to your rental property activities.
The only way that you can deduct interest on personal-use funds is to take the loan out against your home instead of your investment property.