Can I deduct the interest of my home equity line as my rental property expenses?

October 25th, 2010 | by admin |

I live in CA. I bought a rental property using my residential equity line of credit. Can I deduct the interest of this equity line of credit as my rental business expense or can I count the interest as the mortgage payment?

Thank you.

I would deduct it from the place that does you the most good. It can be deducted as a business expense or it can be deducted as a personal expense. Interest and fees on a home equity line of credit is a legitimate deduction.

Have your tax preparer do it both ways to see which way is the most advantageous for you. That’s what good tax people do. By running it through your business you should also be able to save money on your social security taxes because it lowers your earned income. If you don’t need the deduction for your business then deduct it from your personal income lowering your unearned income amount.

  1. 4 Responses to “Can I deduct the interest of my home equity line as my rental property expenses?”

  2. By Caveat Emptor on Oct 26, 2010 | Reply

    No.
    References :

  3. By Sar on Oct 26, 2010 | Reply

    I’m not sure-I would ask an accountant to be on the safe side.
    References :

  4. By Glenn S on Oct 26, 2010 | Reply

    I would deduct it from the place that does you the most good. It can be deducted as a business expense or it can be deducted as a personal expense. Interest and fees on a home equity line of credit is a legitimate deduction.

    Have your tax preparer do it both ways to see which way is the most advantageous for you. That’s what good tax people do. By running it through your business you should also be able to save money on your social security taxes because it lowers your earned income. If you don’t need the deduction for your business then deduct it from your personal income lowering your unearned income amount.
    References :

  5. By Doctor Deth on Oct 26, 2010 | Reply

    I would say yes, since that loan was used to buy the rental property – list it under mortgage interest on your Schedule E on your 1040
    References :

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