benectar

I recently sold my business and plan to use the gain to buy a rental property. I currently have 2 mortgages on 2 homes, one for my parents.

Given that I can only use 2 home for itemized deduction, should I

1. pay off one of the mortgages (~$90K), and take on a bigger mortgage?

Or

2. should I keep the current mortgage, use that to offset future rental income, and take on a smaller mortgage for the new home?

We are at the highest income bracket, paying AMT, cap gain tax for this year will be high.

Any advices are greatly appreciated.

Thanks,

-Gina