Default Mercury


I pay interest on money borrowed to purchase land on which to build my home. I built a home on that land, but have no mortgage. Is the interest I pay for the land deductible? Where is it deductible on the return?

Until you started construction, the interest on the loan to purchase the lot was not deductible as mortgage interest. Once you started construction on the property, it became deductible as home mortgage interest provided that the loan was secured by the house, and all other conditions for deductibility of home mortgage interest were met. For more information, refer to Publication 936, Home Mortgage Interest Deduction and Tax Topic 505, Interest Expense. The deductible home mortgage interest is taken on line 10 or 11 of Form 1040, Schedule A (PDF), Itemized Deductions.

See related Item: http://

Go back