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Subject:  Re: Mortgage Interest Deductibility Date:  7/19/2019  12:17 PM
Author:  aj485 Number:  129508 of 131280

We are looking at buying real estate which may be used for personal use, rental, or a mix of the two. If we pay cash first and then quickly get a loan, do we give up any of our abilities to deduct mortgage interest because there was a delay in getting the mortgage?

Not necessarily.

If not, how much time would we have to get the mortgage?

Per IRS Pub 936 a home acquired within 90 days before or after you take out the mortgage can be considered acquisition debt:

Mortgage treated as used to buy, build, or substantially improve home. A mortgage secured by a qualified home may be treated as home acquisition debt, even if you don't actually use the proceeds to buy, build, or substantially improve the home. This applies in the following situations.

1. You buy your home within 90 days before or after the date you take out the mortgage. The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements within the limit described below in (2) or (3). (See Example 1, later.)

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