Investment property or 2nd Home

[Bird Legs]

Client bought some land in 2005 and put a travel trailer on it.
They do not live there. Have a regular home about 40 miles away.
The land is financed through a mortgage company.
Question; is the interest paid on mortgage, on land, investment interest or 2nd home
interest?
Also, there were points paid at closing. How would these be amortized if this land
is investment property? Mortgage is for 15 yrs.
Thanks to everyone. Now back to stress relief.

[JG EA]

Either

I think it could be either, investment or personal (2nd home). Just ask them if they use it as a second home or do they hold it for investment.

Points are not taken in full that's for sure. I'm assuming that they are amortized over the life of the loan in both cases. However, I can't remember this coming up and don't know for sure. But since it's interest and since you can deduct interest in either case (or hold it for the future in some cases) I would say it is OK to amortize.

[Bird Legs]

Jg Ea

Thanks. This was my thinking on this also.