HELOC = Home Equity Line Of Credit. I guess we could write a check for any purpose up to the limit and deduct the interest on Sch A. But we plan to only using the HELOC for business expenses for the condo and hope the interest would be deductible on Sch E.Uh...not quite. If you were using the HELOC for personal purposes (ie, not for financing the rental property or other investment or business purposes) you could only deduct the interest on up to $100,000 of principal you borrowed. This maximum would be reduced by any primary mortgage principal balance in excess of acquisition debt. See the ordering rules and limits in IRS Pub. 936, Home Mortgage Interest Deduction.www.irs.gov/pub/irs-pdf/p936.pdfIra
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