Diane Posted July 16, 2012 Report Posted July 16, 2012 I have a client who took out a loan on his rental that had no existing mortgage. He used none of it on the rental. I am telling him that the interest is nondeductible personal interest. Am I right? Diane Quote
Jack from Ohio Posted July 16, 2012 Report Posted July 16, 2012 You are correct, Diane. Unless the proceeds of the loan are used on/in/for the rental, the loan is personal. Quote
Diane Posted July 16, 2012 Author Report Posted July 16, 2012 Thank you, sometimes you have moments when you doubt yourself. Diane Quote
mcb39 Posted July 16, 2012 Report Posted July 16, 2012 I have a client who took out a personal loan and used it to put a roof on his rental. THEN, is it deductible against the rental. I am asking about the interest in addition to depreciation of the roof. Quote
kcjenkins Posted July 18, 2012 Report Posted July 18, 2012 Yes, it goes both ways. The determination of how to catagorize the interest depends on the use of the borrowed money, not on the collateral. Quote
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