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Bio Bruce
July 7, 2022
Question

land purchase

  • July 7, 2022
  • 1 reply
  • 0 views

Wonder if you could guide me!

I had a good year with my business last year.

This being said I wanted to set my business up for continued success.

I purchased property for $96 on Dec 30th.

I used money left over from revenue earned in 2021 and borrowed from my whole life policy cash value to fund.

Can I expense this purchase that I want to park my vehicles on until I get pole barn installed on property

    1 reply

    Critter-3
    Critter-3
    July 7, 2022

    The purchase price of  LAND  cannot be deducted as it is an asset  and it cannot be depreciated.  Now the interest paid on the loan to purchase the property can be expensed along with the RE taxes.

      S
      SweetieJean
      Employee
      July 7, 2022

      borrowed from my whole life policy cash value to fund.

      I don' believe you can deduct the interest paid on this, as the loan was not secured by the property.

        A
        Anonymous_
        Employee
        July 7, 2022

        If the proceeds from a loan are used for a business purpose, then the interest paid thereon is deductible.

         

        See https://www.law.cornell.edu/cfr/text/26/1.163-8T

         

        See also https://www.irs.gov/publications/p535

         

        The loan does not have to be secured by the property itself.

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