Tax Question

[Nissan197]

I have a 10 acre tract of land that I purchased last year and have a loan on it. Am I able to claim that interest I paid as a deduction on my taxes? It is just a hay field and I have no intention of building on it. It is not part of a business and is just personal land at this time. I am thinking it is considered personal interest and I am unable to claim it as real estate interest. Thoughts?

 

[KTurner]

You can put anything on your taxes, but if the IRS doesn't like it they may throw you in jail

This is probably what you're looking for though... Publication 936 (2012), Home Mortgage Interest Deduction

Keith

 

[sam5570]

i think the only deduction you can take is the intrest you paid on it. that is if you itimize and do long form, witch means you got to have at least 10,000 in deductions.

 

[unbidden]

I have a 10 acre tract of land that I purchased last year and have a loan on it. Am I able to claim that interest I paid as a deduction on my taxes? It is just a hay field and I have no intention of building on it. It is not part of a business and is just personal land at this time. I am thinking it is considered personal interest and I am unable to claim it as real estate interest. Thoughts?

Are you a registered farm?

 

[Nissan197]

No, I am not a registered farm for 2012. I think I will be able to claim it as an investment expense per publication 550. Thanks to all to who responded.

 

[randy41]

you can deduct investment interest expense as an itemized deduction to the extent of investment income. if it was a second home you could deduct it as mortgage interest. i'm guessing that it doesn't take much to make it a second home. many people claim boat interest as interest on a second home. you can deduct the property taxes as an itemized deduction regardless.

 

[teejk]

I have a 10 acre tract of land that I purchased last year and have a loan on it. Am I able to claim that interest I paid as a deduction on my taxes? It is just a hay field and I have no intention of building on it. It is not part of a business and is just personal land at this time. I am thinking it is considered personal interest and I am unable to claim it as real estate interest. Thoughts?

why did you buy the land? your "intent" is very important. If you are "speculating" on land, then check out the rules on "investment interest". is the land currently being "hayed"? you may have a rental property (sch E) or if you are doing it yourself a sch F farming activity. all have their own special rules and limitations but check them out before you give up. and you might want to consider a home equity loan and get rid of the land loan.

 

[clemsonfor]

allow someone to harvest it (or have them rent it from you even if only for $10 or something) if you don't or plant some trees on it. Then file schedule F , which is for farm deductions. You can then deduct taxes on it the interest and any fuel you use to maintain the property.

 

[teejk]

allow someone to harvest it (or have them rent it from you even if only for $10 or something) if you don't or plant some trees on it. Then file schedule F , which is for farm deductions. You can then deduct taxes on it the interest and any fuel you use to maintain the property.

it all comes back to "intent" clem...more facts are needed to salvage a deduction (at which time we can get into the "hobby loss" rules!). and btw, we don't need to simplify our tax code at all (sigh).

 

[cmhyland]

I have a 10 acre tract of land that I purchased last year and have a loan on it. Am I able to claim that interest I paid as a deduction on my taxes? It is just a hay field and I have no intention of building on it. It is not part of a business and is just personal land at this time. I am thinking it is considered personal interest and I am unable to claim it as real estate interest. Thoughts?

You can if your loan is a home equity or second mortgage on the house.