gfizer Posted March 10 Report Posted March 10 Client purchased an unimproved lot that adjoins their principal residence property. Would the interest on the mortgage for the unimproved lot be deductible? My gut says no because there is no qualified home on the lot but then I think is it an "improvement" to the home? I know I'm probably overthinking it but what are your thoughts? Quote
DANRVAN Posted March 10 Report Posted March 10 2 hours ago, gfizer said: I know I'm probably overthinking Excellent question. What is their intent? Hold as investment or use as part of their personal residence property? Sec 163(h) refers to sect 121 for definition of personal residence. Section 1.121-1(b)(3)(i) outlines conditions where an adjacent lot is considered part of personal residence. 2 Quote
gfizer Posted March 10 Author Report Posted March 10 Thanks. I will take a look at that code section. The lot is just protection to keep someone from building right on top of them. 1 Quote
DANRVAN Posted March 10 Report Posted March 10 1 hour ago, gfizer said: The lot is just protection to keep someone from building right on top of them. Sounds to me like it will be used as part of their personal residence. Did they use their residence as collateral? 1 Quote
gfizer Posted March 11 Author Report Posted March 11 No. Only the lot was used to secure the mortgage. Quote
DANRVAN Posted March 12 Report Posted March 12 I was asking out of curiosity, it doesn't make any difference in determining if part of the residence. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.