Mortgage Interest

[SAR-EA]

A client owns a rental with mortgage loan. Client decides to obtain mortgage loan on personal residence which was free and clear to pay off rental mortgage. Where does the new interest go? Still all to Sch E? Part to Sch A? Thanks.

[AZ-Tax]

I vote on Schedule E

A client owns a rental with mortgage loan. Client decides to obtain mortgage loan on personal residence which was free and clear to pay off rental mortgage. Where does the new interest go? Still all to Sch E? Part to Sch A? Thanks.

I vote Schedule E

[Jesse]

I vote Schedule E

Using tracing rules can go on Schedule E, however you must elect to treat debt secured by home as not secured by home under Reg Section 1.163-10T(o)(5).

[Gretel]

I agree, this election is also called a 10-T election. TP can use on Schedule A but only up to $100,000 since this is equity debt.

[SAR-EA]

Thank you all so much for your input. Sch E it is with election 10-T.