[quote=plm][quote=SK in CV][quote=plm]Interest in loans should be an expense too, right? So I should get a loan on my rental and use that to pay off my mortgage on my house. This way I can write off the interest as a business expense as I will probably be taking the standard deduction next year. Also avoid the net investment 3.8% tax if I get a big enough loan to make rental just barely making money.

Is this legal?[/quote]

If your rental doesn’t have a mortgage, and you borrow against it, and use the money to pay off the mortgage on your principle residence, the answer is no. It’s not deductible interest.[/quote]

Makes sense. I suppose if I get a mortgage and use that money to buy another rental then that is allowed. But then I would have to manage another rental.

Thanks[/quote]

Yes, that’s what I have been doing. Cash-out refinance loans, and use to buy another investment, the interest is deductible as an investment expense on the new investment. Or cash out refinance on one property to pay off the loan of an existing investment, that interest is also deductible as an investment expense on the property you are changing the loan on..It doesn’t just apply to property. If you want to take a gamble and buy bitcoins, I believe you could in theory deduct the interest as an investment expense also….no different than margin interest you incur for stock investments (if that’s also your things) is a deductible investment expense too against your investment… There are probably some caps or some floors, I don’t remember the details….. The details are in Publication “550” from the IRS…

And yes I’m pretty certain the $10k cap on prop tax is on personal property tax, what you claim on Schedule A….Property tax for a rental property doesn’t go on schedule A, it goes on Schedule E (or one of the forms associated to Schedule E, which I forget off the top of my head). completely different.