I turned my primary home into a rental property mid year. Before it was a rental I took a home equity loan out on it and used that money for the purchase of our second home. Am I allowed to deduct the interest from the home equity loan along with the primary mortgage interest from the rental income?
under the IRS tracing rules since the HEL was used to buy the second home and not improve the primary residence the interest expense would be deductible on schedule A not schedule E
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