1

If I refinance a commercial property and take money out to pay off my primary residence- is this a taxable event? and is the mortgage interest on the new commercial loan tax deductible? Property is owned as a sole proprietorship by us in California, primary residence is in California as well. No LLC involved.

  • 4
    Please edit and add country tag. Also is the commercial property held directly by you, or you have Incorporated an legal entity – Dheer May 27 '18 at 17:49
  • 1
    Somewhere between 24-48 hours, this question will be put on hold for “unclear” if you do not add country. Any question that has anything to do with local tax code needs that. – JTP - Apologise to Monica May 27 '18 at 22:31
1

I am not a California accountant, but depends on how you account for it.

If you are claiming all the interest on the increased mortgage as a business expense for the commercial property, then the money you took out is a drawing, and will be taxable income for you.

If you're keeping the interest for the existing loan and the new loan separate, and only claiming the interest on the existing loan as a business expense, then, no, I don't expect that would be taxable.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.