Looking for opinions
- Corp owns a building used in active business with no mortgage.
- Corp purchases a second building to be rented out (inactive)
- Bank will finance 70% of purchase price of new building
- Corp borrows 100% of purchase price leveraging the equity in the existing building to make up the 30% down payment.
Is it reasonable to allocate 30% of the interest expense as active and 70% as inactive rental expense?