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Tax deduction on 2nd mortgage from primary residence to purchase rental property

We took out a second mortgage on our primary residence and purchased a rental property.  Is the interest paid on the 2nd mortgage tax deductible?

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Tax deduction on 2nd mortgage from primary residence to purchase rental property


@Mondragon123 wrote:

Is the interest paid on the 2nd mortgage tax deductible?


Yes, through the concept of tracing.

 

See https://www.irs.gov/publications/p936#en_US_2021_publink1000229983

 

Ref: Treas. Reg. §1.163-8T(a)(3)

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2 Replies

Tax deduction on 2nd mortgage from primary residence to purchase rental property


@Mondragon123 wrote:

Is the interest paid on the 2nd mortgage tax deductible?


Yes, through the concept of tracing.

 

See https://www.irs.gov/publications/p936#en_US_2021_publink1000229983

 

Ref: Treas. Reg. §1.163-8T(a)(3)

TomD8
Level 15

Tax deduction on 2nd mortgage from primary residence to purchase rental property

You might also find this web reference helpful:

https://www.rocketmortgage.com/learn/can-you-deduct-second-mortgage-interest

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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