Interest deduction

[Anthony Charles]

I am going to buy a house and currently plan on paying the downpayment with cash.

What I would like to do is after closing, take a cash advance from one of my credit cards to reimburse myself for the downpayment. This way I will have very little cash tied up. My credit card interest rate is low.

Then I would like to deduct the interest from the credit card as 'other interest' on Schedule E.

Is there some way to accomplish this? Basically, I want to 'borrow' the downpayment so that I can deduct the interest cost of this cash.

Any advice would be appreciated.

[Account Closed]

Nothing wrong with deducting credit card interest as a business expense.

Business expenses must be both ordinary and necessary. You can probably prove both of these elements satisfactorily.

You also will need to prove that it was used for the business and not personal reasons. A stand alone business credit card would be best. You will want to document the transaction and the use of the funds. Deposits the cash directly into your business account and using those funds for business purposes may support your claimed use.

Your CPA can probably offer you some good suggestions on how to adequately document the transaction.