San Diego Housing Market News and Analysis
Financing and tax question: HELOC on primary for investment property, can it offset income?
User Forum Topic
Submitted by flu on February 18, 2012 - 9:16pm
I'm too lazy to look this up so if anyone knows this off the top of their head, please let me know.
Please, I'm a little dumb and lazy right now..And I know..talk to a accountant..But if anyone knows, please let me know beforehand.
1)I believe the answer this question is yes...But I'll ask anyway..
If I take out a HELOC on my primary resident and use that to buy an investment property, can my mortgage interest from my HELOC loan be used on schedule E to offset my rental income? I believe the answer here is yes.
2)I just want verification of the following..
If I cash out refinance my primary resident and use that extra cash to buy an investment property, from a tax reporting perspective, I'm already taking taking a primary mortgage interest itemized deduction on schedule A, so I will not ahave an mortgage interest that I can use on schedule E to offset the rental income... This I know... BUT....
Is there any difference in my overall tax bill if I do this versus if I were to take out a loan on the investment property and use that to on soffset rental income??
Ehh. Let me explain.
Is there any difference in my tax bill if I
a)Refinance and cash out an extra $200k from my primary with that extra $200k being 30year/4.0%, and deduct that extra mortgage interest deduction on my tax bill on schedule A....
b)Take out a $200k loan 30year/4.0% on the investment property itself and use the mortgage interest paid on this loan on schedule E to offset my rental income (again, forget about costs of HOA/propertytax/etc)...
Is there fundamentally any difference between (a) and (b) from a tax bill perspective assuming that I can get the exact same loan terms for the $200k?
Sorry, I'm having a brain fart right now and too stupid/lazy to be reading and researching..
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