home equity line deductiblity

[bumpo]

Client purchased a rental property with proceeds from his home equity line of credit. Can any interest he paid on the loan be applied as a "mortgage interest" deduction on Schedule E? He does not have enough other deductions to use Sch A.

Thank you in advance

[TaxGuyBill]

Yes, the "tracing rules" can put the deduction on Schedule E.

[taxea]

Yes, the "tracing rules" can put the deduction on Schedule E.

Allocate between Sch A and Sch E based on amount used for rental property.