Great nuggets of info! Thank you all for the help! I think I need to provide a few extra details and ask a couple of clarifying questions.
Rental-A was purchased in March of this year. The $43K down payment and $18K fix-up were paid out of my checking account back in March/April. Based upon @Joe Splitrock's answer, the IRS would have let me borrow those amounts (debt on Rental-B) and it would be tax deductible, all totaling $189K. I wasn't smart enough to do that in March/April. Is it too late to borrow now and characterize it as some kind of delayed financing?
I did take a 401K loan in February for $42K for an unrelated personal reason, just weeks before putting the $43K down on the mortgage. My employer has contributed $17.5K to my 401k. I think I read somewhere that borrowing against employer contributions (not my elective contributions) could be tax deductible? @Holly Chan am I remembering correctly? If so, could I ethically characterize $17.5K of my loan as being used for the purchase of Rental-A or is it too late? Is it just a matter of what I was thinking at the time, which would seem rather punitive?
I wish I'd thought of all this back at the time and planned better. Lesson learned.
