Home Mtg Interest on Vacant Land

[DMICPA]

Client owned and lived on land in a Mobile Home and is paying mortgage interest on the loan for the above.

Now, client has got rid of the mobile home a few years back and, being a truck driver, mostly lives in his truck. Still pays mortgage interest on the loan.

My research shows that if the land is vacant, and is not held for investment, there is no longer a deduction for mortgage interest as the interest becomes personal and is non-deductible.

I am correct in my thinking?

[ChEAr$]

Client owned and lived on land in a Mobile Home and is paying mortgage interest on the loan for the above.

Now, client has got rid of the mobile home a few years back and, being a truck driver, mostly lives in his truck. Still pays mortgage interest on the loan.

My research shows that if the land is vacant, and is not held for investment, there is no longer a deduction for mortgage interest as the interest becomes personal and is non-deductible.

I am correct in my thinking?

AbsoLUTELY!

[AJsTax]

ok, but

what vacant land is NOT held for investment.??

[Burke]

Mortgage loan interest is interest secured by a home. How can interest on land be mortgage interest in the first place?

[DMICPA]

Interest puzzle

At some time in the past, there was a mobile home on it that constituted a principal residence.

The mobil home is long gone. The mortgage loan is still around.

The problem is that if the land is vacant, it no longer is a principal residence and has not been for years. The interest in this situation is considered "personal" and therefore not deductible.

I am trying for investment interest but it depends on the intent and actions of the taxpayer.

If the taxpayer is not on board with the investment interest classification, I am not going to deduct it.

[gkaiseril]

Maybe you can add the cost of carrying this investment to the basis.

[DMICPA]

Mortgage Interest

The taxpayer just called me and said he is going to move back on the property and once again, it will be a principal residence.

At this point, I am claiming it as Mortgage interest. In any event, the taxpayer has enough investment interest to more than provide for the interest being classified as investment interest.

Another example of a "simple" return that takes tons of time and phone calls and research.

[ChEAr$]

what vacant land is NOT held for investment.??

Hunting land.
It's personal use only.

[ChEAr$]

The taxpayer just called me and said he is going to move back on the property and once again, it will be a principal residence.

At this point, I am claiming it as Mortgage interest. In any event, the taxpayer has enough investment interest to more than provide for the interest being classified as investment interest.

Another example of a "simple" return that takes tons of time and phone calls and research.

Key words above: "going to be", as in the future, as in not for 2009.