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Interest on rental property is NOT affected by the new tax laws which by the way, have NO EFFECT on your 2017 taxes. Since rental property is business property, the interest paid on the mortgage is a business expense, and fully deductible.
Just to clarify, if I take a home equity loan or refinance my PRIMARY residence and use that money towards acquiring a rental property. The interest would be tax-deductible as a business expense? Please advise.
I have the same question. Anybody have an answer?
there are tracing rules. if you follow the Regs 1.163-8T and 10T. then it depends what you use the HELOC for. put it into a brokerage account and it's investment interest (schedule a) and therefore the deduction would be limited to investment income. use it to buy a recreational boat (not for profit) it isn't deductible at all.
you might even want to read this about HELOC
https://content.govdelivery.com/accounts/USIRS/bulletins/1dca891
(IR-2018-32)
especially example 1
tax simplification at its finest
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