Trust with 2 depreciated condos? Cash out to buy 3rd?

[Rich Peterson]

Hi,

I have a trust which has two fully paid off / depreciated condos.  I am debating buying a third condo cashing out of the first two condos to pay for it.

The depreciation of the third condo will help offset all the passive income within the trust.  I am figuring a 30 year traditional "cash out" mortgage & got a quote of 4.25% for an investment mortgage.

If I were to mortgage my personal home I could get 3.5% however thats me vs the trust.

Can I mortgage my home, use the cash in it to lend the trust money (at a 4.25% investor rate), then write off the interest in the trust from myself personally?  

Am I looking at this incorrectly?  I will seek the advice of a professional but figured I would check here first to see if I am going about this the right way.

Thanks,

Richard