Wisconsin Beth
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No, we don't walk away. But when we're holding on to something precious, we run.
Joined: Dec 20, 2010 11:59:36 GMT -5
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Post by Wisconsin Beth on Feb 28, 2011 14:32:11 GMT -5
My husband and I got stuck when doing our taxes. Below is the abbreviated question, written up by DH. Any answers are appreciated. I posted this on the Tax board too. And I'll be popping in and out to check for questions. Thanks, Beth
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In January, my spouse and I received a 2010 1098 interest mortgage statement for vacant land that we purchased. We have not built a home on it nor do we intend to build a home on it for several years.
Not sure if this information matters but our vacant land loan is through United FCS. United FCS is a farmer-owned financial services cooperative that provides credit & financial management services to agricultural producers and agri-businesses including long-term mortgage loans (for land and other purchases) We are not farming the land nor do we intend to do so. United FCS knows this.
We are in the middle of completing our taxes for 2010. We itemize our deductions. I believe we cannot take the home mortgage interest deduction for our vacant land for 2010 since we are not building on it. However, where can we claim this interest on our taxes? Does this go under investment income? Also, can we deduct the taxes we paid on this land in the same manner as we deduct the real estate taxes on our home?
Any feedback would be appreciated. Thanks.
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Post by Savoir Faire-Demogague in NJ on Feb 28, 2011 14:55:06 GMT -5
You should be able to find the answer in the instruction booklet for the itemized deductions schedule, regarding interest deductions. It should indicate what qualifies regarding deductibility of certain interest payments.
I have not done my taxes in over a decade due to the complexity.
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Deleted
Joined: May 3, 2024 16:08:02 GMT -5
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Post by Deleted on Feb 28, 2011 15:00:05 GMT -5
What is the purpose of the vacant land?
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Wisconsin Beth
Distinguished Associate
No, we don't walk away. But when we're holding on to something precious, we run.
Joined: Dec 20, 2010 11:59:36 GMT -5
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Post by Wisconsin Beth on Feb 28, 2011 15:14:12 GMT -5
SF, we read though quite a few of the schedules instruction books. It was rather like falling down the rabbit hole in Alice in Wonderland, each one leading us to something else that seemed to conflict and create confusion.
Archie, it's vacation land. Long term goal is to build on it but definitely not within the 2 years of purchase (which one of the schedules referenced.)
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973beachbum
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Post by 973beachbum on Feb 28, 2011 16:02:45 GMT -5
The way I understand what you are saying this is interest on a mortgage for land you bought that does not yet have a residence on it. Right? (or Eh for our Canadian friends. ) If this is correct then no you can not deduct the interest as it does not pass the residence test.
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Wisconsin Beth
Distinguished Associate
No, we don't walk away. But when we're holding on to something precious, we run.
Joined: Dec 20, 2010 11:59:36 GMT -5
Posts: 30,626
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Post by Wisconsin Beth on Feb 28, 2011 16:19:25 GMT -5
The way I understand what you are saying this is interest on a mortgage for land you bought that does not yet have a residence on it. Right? (or Eh for our Canadian friends. ) If this is correct then no you can not deduct the interest as it does not pass the residence test. Yes, it's vacation land without any fixed structures on it. We'd like to build at some point but it won't be anytime soon.
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cronewitch
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Post by cronewitch on Feb 28, 2011 16:22:20 GMT -5
It isn't deductible at all as personal property that isn't a second home or investment like rental property.
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Wisconsin Beth
Distinguished Associate
No, we don't walk away. But when we're holding on to something precious, we run.
Joined: Dec 20, 2010 11:59:36 GMT -5
Posts: 30,626
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Post by Wisconsin Beth on Mar 1, 2011 12:14:28 GMT -5
Thank you everyone.
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