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Updated over 15 years ago,
Tax implications of carrying debt on primary vs investment property?
Hi there,
My husband and I are first-time landlords due to a property inheritance. The home we inherited does not currently have a mortgage on it.
We are looking at refinancing our primary residence, and I'm thinking there will be a tax benefit to shifting some of our debt to the rental property, but I was hoping someone on this forum can validate or disprove my thinking.
Every year we end up paying the Alternative Minimum Tax, which makes a portion of the mortgage interest on our primary residence non-deductible. I'm thinking that we should shift part of the loan balance on our primary residence to a mortgage on our rental property, so that the interest can be expensed against the rental income, and not hit AMT limits.
Does anyone see any holes in this logic?
Thanks much!
Kelle