Is Interest on HELOC secured by rental property tax deductible?

[Eric Jones]

I have a tax question regarding the mortgage interest tax deduction on investment properties.

Here's the scenario:

1. Currently have a large HELOC on my primary residence (House A)

2. Use the HELOC to make a large down payment on a new primary residence (House B)

3. Move out of House A and into House B

4. Rent out House A and the interest incurred on the HELOC for the down payment on the new house is paid by the tenants on the old house

Is the interest incurred on the HELOC on House A tax deductible since it is being used as a rental property? The cash itself would be used for non-investment purposes (the down payment on House B), but if the debt was incurred prior to moving out of House A, then it's really just my financing strategy for the rental property and should be tax deductible.