Viable Tax deduction Scenario?

[Ayo Odusanya]

Good morning all, 

My first post, so apologies if i do not follow the appropriate etiquette. MY wife and I have a bit of a complex situation that we need advice on. Details below:

Main goal: Reduce our W2 Taxes.

Current Primary Residence

• Town home with 2.5% mortgage
• Under just my name
• We Also have a HELOC available to us with this property.
  • Rate is prime – 0.25%
• Immediate plans with this home is to transfer deed to an LLC, under me and my wife's name and convert to a rental property.

We are about to close on a new Primary Residence.

New Primary Residence

• Single family home with 6.5%
• Approved to Close on the property and mortgage under just my wife’s name.
• We have the downpayment of the home sitting in our savings account with 4.5% APR
• Downpayment is $60K

The questions:

• 1. For Tax savings, Would it be a good idea If we use the HELOC on our current primary mortgage as the down payment for the New home?
  •    The thought is to claim heloc interest as tax deductible
•          The confusion is regarding the heloc being on a property on my name that’s converting to investment, going to a property that’s under                  my wifes name that’s the new primary.
• 2. If the above is indeed a good idea, does the timing of events matter?
• • I.e should we pay the down payment before transferring the deed to the LLC or none of that matters?

Any help on this would be greatly appreciated!