Home equity loan interest

[Brobertson212]

I turned my primary home into a rental property mid year. Before it was a rental I took a home equity loan out on it and used that money for the purchase of our second home. Am I allowed to deduct the interest from the home equity loan along with the primary mortgage interest from the rental income?

[Mike9241 · Accepted solution]

under the IRS tracing rules since the HEL was used to buy the second home and not improve the primary residence the interest expense would be deductible on schedule A not schedule E