The post was trolled and then moved from Tax section to Classifieds section by BP.... 

Hope that helps.

Hope this makes sense.

The only part that Property 1 pays on that loan is the escrow for property tax & insurance for Property 1.Thank you for your insight.You need to look at purchase price to determine cost basis, not how you financed the purchase.

We owe $154k on the property and the interest rate is 4.25%, the monthly mortgage is $1050 with taxes and insurance.

@Kevin Hoover, with certain types of entities it is possible to contribute property to and distribute property from that entity without triggering a tax event. 

A FHA 203k Loan is where the purchase price and rehab costs are rolled into a single loan.Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate) AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC/ LLC taxed as an S Corp, or an S Corp.

It will also allow you to pull some cash out if you have the equity and for tax purposes.You can have two VA loans at the same time but having two means that the second home may not qualify for 100%. 

Account ClosedI recommend that have a consultation with your tax accountant and/or financial advisor on ways to reduce your taxes. 

Hope this helps!