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April 8, 2022
Question

I refinanced my home and withdraw 160,000 and used 135,000 of it to purchase my rental. Can I use the interest charged on that money as an expense for my rental.

  • April 8, 2022
  • 2 replies
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2 replies

LeonardS
April 8, 2022

Yes, the interest charged on the portion of the refi used to purchase the rental property can be deducted as an expense for the rental property.  The interest expenses can be apportioned by the percentage of the withdrawn amount used to purchase the rental property.

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Carl11_2
Employee
April 8, 2022

Make absolutely certain that you keep good records on the money flow, as the tracing rules do apply.