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Article Date:
October 2026


Word Count:
928

 

 

Refinancing a Rental: Avoid a Bad Interest-Deduction Trace


Question

 

Three years ago, I refinanced my rental property, took out $60,000 of equity, and used the $60,000 for personal purposes. Since this loan is secured by my rental property, may I deduct the interest as rental property interest?

 

Answer

 

No. The interest on that $60,000 is personal interest, and you may not deduct it.

 

That is the whole of the usual answer, and it is where most write-ups stop.

 

Keep reading, though, because there is a rule buried in the same regulation that is probably already fixing this for you. You may be entitled to more ... Log in to view full article.

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