Interest and IRS $

[dabecktax]

A client of mine paid in 2006 money to the IRS for the 2003 tax year with interest. Is any of this deductable?


Thank you

[oceanlovin'ea]

No

The only interest that is deductible is mortgage interest.

So interest paid to IRS is not a deductible item.

Linda F

[jainen]

interest that is deductible

>>The only interest that is deductible is mortgage interest.<<

Hmmmm. Doesn't a tax liability automatically attach as a lien against all property?

[S T]

IRS and Interest

I believe the interest paid to the IRS for late filings, amendments, etc, are all considered personal interest, and therefore would not be deductible.

Sandy

[jainen]

...but suppose

>>all considered personal interest<<

...but suppose a lien was filed (or automatically attaches). Then the debt is secured by the property and comes under the $100,000 home equity rules!

[WhiteOleander]

>>all considered personal interest<<

...but suppose a lien was filed (or automatically attaches). Then the debt is secured by the property and comes under the $100,000 home equity rules!

Uh Oh. I smell trouble.

[WhiteOleander]

The only interest that is deductible is mortgage interest.

So interest paid to IRS is not a deductible item.

Linda F

Investment interest is deductible if you meet the requirements.

[Davc]

>>The only interest that is deductible is mortgage interest.<<

Hmmmm. Doesn't a tax liability automatically attach as a lien against all property?

I thought that interest on late payment of property tax should be deductible, but found a cite saying it wasn't. In Or after three years the county sells your property.

[jerome]

Interest on the underpayment of non-corporate taxes is considered personal interest regardless of the source of the income generating the tax liability [Reg. Sec. 1.163-9T(b)(2)(i)(A)]. The courts have upheld this regulation in the context of a Schedule C and Schedule F business where additional tax was due as a result of the business, and the additional interest on that tax assessed by IRS was considered personal interest.

[Jesse]

>>all considered personal interest<<

...but suppose a lien was filed (or automatically attaches). Then the debt is secured by the property and comes under the $100,000 home equity rules!

I thought that interest on late payment of property tax should be deductible, but found a cite saying it wasn't. In Or after three years the county sells your property.

I would think that interest on property taxes would be deductible as Jainen quotes. Is there a cite specifically excluding this interest?