Q: If I take out a home equity loan and use proceeds to buy rental income property with no other mortgage on rental property, is interest on equity loan against my home deductible as a business expense of the rental property.
This may not be a question that merits a place in your article, but maybe you can direct me to answer if it’s off your usual subject matter.
A: Unfortunately, I don’t think you can write off the interest you pay on the home equity loan as a rental property expense.
However, you might want to use the home equity loan to purchase the property and then take out a home equity on the business property. Once you have a loan that is tied directly to the rental property, you can write off the interest and any costs associated with getting the property.
For more information on the tax implications of rental property, try Vern Hoven’s Book, The Real Estate Investor’s Tax Guide. You should be able to get it through my website, amazon.com or at your local bookseller.