DSCR Loan Interest Tax Deduction

[Abby Howe]

Hi everyone,

  I have a question about DSCR loans. An accountant told me that I wouldn't be able to write off the interest on a DSCR loan if I cash out from a paid-off property to acquire or pay for another property. I've done some research online and even consulted ChatGPT, but I want to triple-check the information with you experts! I'm looking forward to hearing your insights and experiences regarding this topic. Thank you!

[Matt Devincenzo]

I'm not a tax guy, so I won't pretend to be one now...That said, he's likely given you half the story or you misunderstood half...

What he's referring to on the cash-out and you are looking for on the re-investment are the IRC "interest tracing rules"...I'll let a real tax guy handle the explanation, but a search for that term should get you where you need to go.