mortgage interest on lot

[Unregistered]

Taxpayer has 1098 mortgage interest statement of $7500 on $175000 lot he purchased.
Plans to build home at some point in the future. Does this qualify as acquisition
indebtedness and thus for the mortgage interest decuction on sch A?

I would be thankful for any thoughts, Dixie in NC

[KJ Judd]

If the home is under construction, in the plans or dirt moved, it can be qualified residence interest. However, the home has to be completed within two years of the start.

Otherwise it would be investment interest expense.

[Unregistered]

Thanks KJ Judd

That was my understanding as well, what was confusing me was the fact interest is being
reported on the 1098 mortgage interest form by bank.


Dixie in NC