Deductible interest after a cash-out refi
I need some help understanding what interest I can/can’t deduct on schedule E.
I did a cash-out refi on the duplex I live in back in August. That refi also paid off a heloc I had on the property. 75% of that heloc had been used for a down payment on another rental 2 years ago.
So with the interest I’ve paid on the new loan, I believe I can’t deduct the amount that would for the cash-out (as a percentage of the principal). What I’m not sure about is the heloc portion of the new loan. Am I allowed to deduct the 75% of the heloc portion of the new principal? Then I’ll deduct 50% of the original loan portion since only 50% of the residence is a rental?
Hopefully I described this well enough. Engineers know numbers but that doesn’t mean they are any good at explaining them.
Are there any other tax implications that this would have had?