Answer:
Increase interest deductions for the limited partners.
Explanation:
In the given scenario the general partner refinances an existing $5,000,000 mortgage on a $10,000,000 property to the original amount of $8,000,000. The interest rate on both mortgages is the same.
Refinancing a loan means that more money is disbursed to the borrower before the termination of the loan.
When a loan is refinanced at the same interest rate the borrower pays more interest.
For example if the mortgage remains at $5,000,000 the interest paid on this principal will be lower.
When the loan is refinanced to $8,000,000 at the same Interest rate the interest paid will be higher because principal is higher.
So the general partner aims to increase the amount of interest paid.
