topic Can I deduct interest on a HELOC secured by my main home, and where 100% borrowed funds were used for restoring my second home, which is now full time rented (20% of year 2020)? in Investors & landlords

Can I deduct interest on a HELOC secured by my main home, and where 100% borrowed funds were used for restoring my second home, which is now full time rented (20% of year 2020)?

FLORIDABOY1 — Mon, 29 Mar 2021 00:41:02 GMT

Carl — Mon, 29 Mar 2021 00:48:49 GMT

Yes, you can deduct the interest on SCH E. Tracing rules apply.

See IRS Publication 535 Chapter 4 here for details and requirements.

KrisD15 — Mon, 29 Mar 2021 00:54:29 GMT

No, not as home mortgage interest but Yes as interest expense on the rental.

The expenses would only be claimed for the time after it became a rental (was ready to be rented)