Question

Deduct HELOC interest for rental property

Forum|Forum|6 years ago
January 22, 2020
1 reply
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I’m using my father’s HELOC to pay for a rental property outright (cash purchase). My understanding is that generally, interest paid for rentals is deductible. Can I claim the interest I’m paying on his HELOC in order to own this property? He is simply a pass-through from me to the HELOC bank.

N

NCPERSON1

unfortunately no. the debt would have to be in your name and secured by your property to deduct the interest.

In fact, he can't deduct the interest either, because he did 'cash out' to give you the money and he is required to purchase or improve the property he borrowed against in order for him to deduct the money; he didn't do that either.