Home
Tax Articles
Tax FAQ
Introducing Our Firm
Our Services
Real Estate Taxletter
Need Help?
Other Websites
Site Map

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+

Is a mortgage on our rental house tax deductible?

August 10, 2011


From:  Abe
Date:  1 Sep 2010
Subject:  Interest Tracing rule

Hi Michael:

We bought a primary residence house A in 1999 for $335,000, with a mortgage of $268,000.

The $268,000 mortgage was paid off in 2005.

In 2009, we borrowed $400,000 as a mortgage against house A to buy our new primary residence, house B. We had two loans, $400,000 on house A and $410,000 on house B. The reason was the $400,000 was a conforming loan with a much better interest rate than a jumbo loan for $810,000.

When we moved to house B, house A was converted to a rental property.

Is the interest for the $400,000 loan on house A tax deductible?

Thank s in advance.

Regards,
Abe

Answer

Date:  8 Sep 2010

Hello Abe,

No.

If you refinance house B to wrap in the financing now secured by house A, the interest on the new loan will be tax deductible.

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Is a mortgage on our rental house tax deductible?

Home | Real Estate Taxletter | Articles | FAQ | Introducing Michael Gray, CPA | Need Help? | Other Links


Michael Gray, CPA
2190 Stokes St., Suite 102
San Jose, California 95128-4512
(408) 918-3162
Fax (408) 998-2766
email: mgray@taxtrimmers.com
© 2016
Subscribe to
Michael Gray, CPA's
Real Estate Tax Letter
!

subscribe
unsubscribe