[Rhonda]

I deduct mortgage interest? It becomes a little more complicated. I would like to roll the rental mortgage into my primary mortgage because the rates are much better (2.25%). So my question becomes, can I deduct the percentage of the mortgage interest that would apply to the rental home? Or does the mortgage have to be on the actual rental property to qualify for the deduction? I could not find a definitive answer on the IRS website. A little more information, I don't have enough deductions to itemize, so that is not an option.Thanks in advance for any insightI have not been real clear. I would be using my primary residence as collateral for the loan, but the only reason I am taking out the loan is to pay for the rental property. I don't currently have a mortgage on my home. The interest rates are much better if I use my home as collateral vs. the rental property. Also, since I the amount of the mortgage is about 50% of the value of my primary residence and about 85% of the value of the rental property - I don't have to pay the bank appraisal fees, and a myriad of other costs. I will save about a $1,000.

[Poop Nugget]

I believe that you can indeed deduct the mortgage interest. However, the rental income will count towards your gross income, so you will still be taxed more.