So…I think I screwed up. Recently did a cash out refi on a rental in anticipation of the RE and/or stock market softening in 6–18 months. Took out a few 100k and had planned to deduct the interest on Schedule E. Now, after doing a bit more reading, I’ve learned that only the interest on acquisition debt is deductible.
Anyone have experience with this or suggestions? For those that routinely take cash out of rentals, where do you put the proceeds for maximum tax efficiency?