refinancing a rental property

[jfwfla]

What is the name of your state? Florida

I was wondering if I refi a condo I rent out in order to cash out equity, How will the IRS view the new loan?

In other words, I currently have a mortgage balance of about $46,000.00 and have been showing about $2,500.00 per year inerest deduction on my schedule E. If I refi to it's current value, I will have a $120,000.00 mortgage with about $7,000.00 interest deductions showing on my schedule E.

Will the IRS allow this even if I'm not using the cash to do anything concerning the rental property itself?

 

[seniorjudge]

What is the name of your state? Florida

I was wondering if I refi a condo I rent out in order to cash out equity, How will the IRS view the new loan?

In other words, I currently have a mortgage balance of about $46,000.00 and have been showing about $2,500.00 per year inerest deduction on my schedule E. If I refi to it's current value, I will have a $120,000.00 mortgage with about $7,000.00 interest deductions showing on my schedule E.

Will the IRS allow this even if I'm not using the cash to do anything concerning the rental property itself?

Post this in the tax section and tell them we sent you over so you do not get a nastygram for doubleposting.

 

[PghREA]

Or you could call your CPA and ask him this question.

 

[jfwfla]

OK, thanks!

 

[seniorjudge]

Or you could call your CPA and ask him this question.

Excellent answer....

 

[jfwfla]

Excellent answer....

Would be an ecellent answer if I had a CPA or Attorney on retainer.

I own one small condo which doesn't even produce a positive cash flow yet, egro, seeking out a CPA would just add to my already negative cash flow.

Was hoping I might get an answer here, but no one (so far anyway) seems to know.

 

[seniorjudge]

Would be an ecellent answer if I had a CPA or Attorney on retainer.

I own one small condo which doesn't even produce a positive cash flow yet, egro, seeking out a CPA would just add to my already negative cash flow.

Was hoping I might get an answer here, but no one (so far anyway) seems to know.

Did you post in the tax forum like I told you to?

 

[jfwfla]

Did you post in the tax forum like I told you to?

Yes I did. There was one reply in which the poster gave an opinion but, said they weren't entirely sure how it would effect my taxes.

I appreciate you help though.

 

[PghREA]

What is the name of your state? Florida

I was wondering if I refi a condo I rent out in order to cash out equity, How will the IRS view the new loan?

In other words, I currently have a mortgage balance of about $46,000.00 and have been showing about $2,500.00 per year inerest deduction on my schedule E. If I refi to it's current value, I will have a $120,000.00 mortgage with about $7,000.00 interest deductions showing on my schedule E.

Will the IRS allow this even if I'm not using the cash to do anything concerning the rental property itself?

Yes, they would.