Refi cash out for rental repairs not improvements.

Technical topics regarding tax preparation.
#1
EZTAX  
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Taxpayer pulls out 50k on refi of rental property. Almost 20k in repairs due to prior tenants trashing building.

I know improvements count toward calculating deductible interest but what about money put into repairs?

And taking it one step further, what if they had to pull money out to pay for carrying costs? I was thinking not included in the calculation but now I am doubting myself. Interest on loans used to finance business expenses on a schedule C are ok - what about on a schedule E?
 

#2
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The language used in the 1.166-8T reg is "expenditures".

See:

Temp Reg 1.163-8T(a)(4)
Temp Reg 1.163-8T(b)(4)
 

#3
EZTAX  
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Thanks Man. Appreciate you taking the time.
 


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