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    Post: rental property tax - mortgage interest

    Posted by Brian Carter on 4/25/11


    I have a rental property worth $220k with no mortgage.
    The property income is around is around $17k annual.

    I am living in a different house with a $280k mortgage.
    If I had sold the rental property instead of renting, I
    would have only needed a $60k mortgage.

    I would like to ensure that I structure this to be able to
    deduct mortgage interest for the interest paid on the
    value of the rental property - $220k. What are my options?

    1) Do I take out a mortage on the rental property and use
    the funds to pay off a good portion of my other mortgage?
    This is costly and requires new loan fees but provides a
    secured debt directly related to the rental property.

    2) Do I form an LLC and charge the LLC a fee to use my
    property for the rental business?

    3) Can I just not do anything with changing loans and
    calculate the portion of the interest applicable to the
    rental property value and deduct that against the rental
    property income?

    Please help with any ideas.

    Posts on this thread, including this one
  • rental property tax - mortgage interest , 4/25/11, by Brian Carter.

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