Hello -

I have a residential rental (prop a) that I put on SchE and it is paid off (no current mortgage). It is not in an LLC and I rent to relatives at fair market price.
I am interested in purchasing a commercial office building (prop b) to rent to Dr. and also to my spouse's PLLC under her Sch C, and we are married filing joint.
When I mortgage prop a to buy prop b, can I take the deduction for prop a as interest on the prop a part of the sch e? Also, can I enter on sch e the mortgage for prop a even though I am using the funds for another purpose (to buy prop b)?

Also, is it best to take the money and loan it to the LLC that I will form to purchase prop b, so I can charge the LLC interest, and deduct that interest? It will be flowing back to self, but since my spouses PLLC will be paying some rent it will reduce her sch c income and self employment tax.

Also, since Prop B will be a medical office rental and there will be two Dr. s in there (one is my spouse), I am wondering if I should still do this under a Sch E, or move to Sch C.

Thanks