1098 mortgage interest

[DixieEA]

Taxpayer has 1098 form interest of $5000. It is for loan on lot, bought lot with intention of
building home, but may be yrs before construction begins. I do not think i can deduct as
home interest, could I use as investment interest? Help, my mind is about shot at this
point.

Thanks, DixieEA

[skhyatt]

There is a good example in TTB 4-13. Interest paid prior to the start of construction is personal interest. Cannot treat the interest as investment interest since the intent in purchasing the lot was to build a new home.

[DixieEA]

more information

Thanks skhyatt for your response. I saw that example in TTB. My client bought lot in 2004
in resort location with building intentions, but since that time has built home in another
location and is never planning to build on the original lot. Thus it seems to me this would
be investment property. What do you think?

Thanks, DixieEA