Signature Loan

[Craig Osborn]

Hello all, after loosing out on a good deal to a cash buyer, I decided to take a different path. I found an inexpensive property that would be difficult to finance through a standard mortgage. I decided to secure a 35,000 signature loan @ 7%. The ARV on the property will be around 75k. I picked it up for 39k and it will need 15k in improvements. I do plan to hold this property. One of two units is occupied. My improvement efforts will be be mostly focused on one unit which will remain vacant while the work is being completed. My question is this- Can I deduct the interest expense for a signature loan? Other facts that may or may not be relevant... I did park the loan money in my personal checking account while waiting for my offer to be accepted. I am in the process of setting up an LLC for the property and as soon as I get my tax number I will open up a checking account for this property and transfer the money there. I eventually plan to do a cash out refinance but this will not happen for some time. Let me know your thoughts. Craig