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Old 02-16-2011, 10:40 AM
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Are loan fees from refinance of primary home deductible?

I purchased my first rental property in 2010. It was done with 2 sources of funding. One was a commercial loan directly against the rental property. The second was from a refinance of my primary home loan and I used the remaining equity to purchase the rental. My question is: is there a way that I can deduct a portion of the applicable fees from the primary home refinace? For example, if it cost $1000 for the title insurance, $100k was used for the primary home and $50k was used to purchase the rental, can I deduct $333. Makes sense to me that I can but I'm not sure about the rules. Any help would be appreciated!



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Old 02-17-2011, 04:47 AM
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“ My question is: is there a way that I can deduct a portion of the applicable fees from the primary home refinace?”---->I guess negative; the interest on your primary home equity loan that you used the proceeds to buy your first rental income property can not be deductible; you can’t write off the interest you pay on the home equity loan as a rental property expense( or as a business expense of the rental property) . However, you might want to use the primary 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 applicable costs associated with getting your first rental property.



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