Your question raises several important issues. First, a Quit Claim Deed will transfer the ownership of the property to the LLC, HOWEVER, this may also trigger a clause in your Mortgage known as the "Due on Sale Clause" Basically, the real property serves as security for the loan made to you. The transfer of title to the property directly impacts the lender's security interest in it. For this reason, most Mortgages include a clause that will permit the Lender to accellerate the Note and make the total balance due immediately upon transfer of title of the real property securing the Note. Some Mortgages avoid this situation by being "assumable." These mortgages are rather rare, however, in todays economy. Moreover, even if your mortgage is assumable, the LLC will have to meet certain underwriting requirements before the Lender will agree to let it assume the Mortgage.
With respect to the tax deduction on the mortgage interest, that would belong to the LLC following the transfer of the Note and Mortgage. Depending upon what type of LLC you have set up and how it is being taxed, this may or may not have a significant tax implication to you.
Another issue that you may not have considered is the Pennsylvania Real Estate Transfer Tax. The transaction you briefly describe does not appear to fall within an exception, therefore, the transfer to the LLC will be subject to Real Estate Transfer Tax.Ask a similar question
I would look at the wisdom of doing this. What would be the point of transferring rental property into the LLC? The point of asset protection is to keep as few assets in the LLC as possible (if you are concerned about creditors of the LLC). You should keep the property in your own name and use the LLC as a property management business that leases the properties. That is what CPA's and attorneys usually recommend. Do not do any of these transfers without first discussing the tax and legal implications with professionals licesensed in your jurisdiction.Ask a similar question