We know that mortgage interest can be deducted expense against rental income.
When we purchased a property initially, we did not get a mortgage for it. The rental property has gone through 3 tax seasons. If we get a (first) mortgage now against the property now, can we deduct the interest as an rental expense in future years.
Additional Question, can 2nd, 3rd, mortgage against a rental property be taken out of another property and deduct its interest as rental expense.
It depends on what the proceeds from the mortgage are used for. For example, if the proceeds from the mortgage are used for personal expenses, then the interest paid on the mortgage will be non-deductible. This is true even if the mortgage is secured against a rental property. On the other hand, if the proceeds from the mortgage are used to purchase an income producing asset (like another rental property, or stocks or bonds), then the interest paid is deductible.
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