[quote=SK in CV][quote=flu]
Shit. I did not know this… So let me get this straight.. If one took out a loan on the original property when buying it, the mortgage interest is deductible. But if one first purchase it with cash and subsequently refinance it taking cash out, it’s not? That sucks….
Looks like plan B… rolling it into another investment property it is….[/quote]
On a personal residence, I think financing put in place within 30 days of COE is treated as purchase money debt for tax purposes. (the part I’m not remembering right now is whether its 30 days. It might be 60.) I don’t think there’s any such exception for investment property. Yeah, it kinda sucks.[/quote]
SK,
I thought the first $100K is deductible, but any amount over that is not unless you use it for improvements on that property. Does this only apply to owner-occupied cash-outs/HELOCs, or might it also apply to rentals?
From what I understand, it is the first $100K that is pulled out via cash-out refi or HELOC on ALL owned properties that can be deducted, so if flu were to cash out $80K on his primary, he could only deduct the interest on ~$20K of the cash-out on another property.
