Cashout on Primary Residence for 230k Loan on Investment Property

3 Replies

My question is can you deduct the full interest rate charged on a cashout loan on my paid off residence

but money used to purchase a rental property. I'm in Round Rock Texas. Is there a limit to how much 

interest you can claim? Loan Amt will be 230k on a 300k house. 20% down.

@Amanda G. , thanks for the shoutout.

@Pat Brown , yes you can if you use entire proceeds for rental. 

If you don’t use 100%, the percentage of interest is deductible. 

This cashout refi is treated just as another business loan, there is no limit. 

This is not Heloc. Even if it was heloc, you could deduct entire interest. There is no limitation on interest deduction if you use the funds fro rental.

I would also suggest comparing interest of heloc and other cash out option to see which one is most favorable. 

Good luck