Can I take a tax credit on interest paid for investment property in Puerto Rico as well as rental property in PR.? one of my clients is a resident of New York, but has two properties in PR. One is rented and the other is a vacation home. Can someone help me?
Tax Professional Answers
The mortgage interest on the rental property is deductible on Schedule E. It would be treated the same as a rental property down the street. The mortgage interest on the vacation home would be personal mortgage interest deductible under the same rules for residences located in the US. Since it is a vacation home, it would be treated as a second residence.
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