Can I use interest from home equity loan on a schedule E if 100% of the funds went to purchasing a 2nd home?
I want to buy an investment property I found for $ 50K. If I take out a home equity loan and use 100% of the money borrowed to buy an investment property can I list the interest I pay on a schedule E? If I take out a little bit extra to fix the investment property up can I still deduct the interest on schedule E?
I can get a better rate on a home equity loan and save $ 1500 in fees instead of getting a mortgage on the investment property. Also the home equity interest would be below my allowed minimum itemized deduction if I put it on my 1040 so it wouldn’t save me any money.
So is this allowed?
Yes this is a duplex that will be rented out. I will never live here.