I refinanced my home in April 2009 and received $123,000 for 15 yrs at a low 4.375 interest rate. I invested the $123,000 in stock and cashed out with a loss of $7,000. I then deposited the money in an account paying 1%.
I am now purchasing an existing coffee house franchise, which has been in business for 5 years, for $125,000 (closing March 2010). Right now the contract does not really go in to any detail about the building, fixtures, equipment, etc. I will be forming an LLC.
My questions are:
1. Can I deduct the home mortgage interest from my business taxes if the money is now used to purchase the business?
2. The 2010 Section 179 deduction will be $135,000. Will I be able to write-off the equipment under Section 179 since it is 5-years old, if not can I use the MACRS?

--------------------------------------------------------------------------------