Mortgage loan on purchase of the lot next door

Forum|Forum|2 years ago
April 4, 2023
2 replies
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I took out a mortgage loan to buy the empty lot next door. Just using for personal use. I received a 1098. Can I deduct the loan interest and real estate taxes?

Thanks

Doug

MinhT1

You cannot deduct the loan interest on the empty lot.

But you can deduct property tax on your home and any property you own in the US.

Beginning in 2018, the total amount of deductible state and local income taxes, including property taxes, is limited to $10,000 per year.

Please read this TurboTax article for more information.

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RobRue

Generally, you can deduct interest and taxes on one each second property.

Bob

Opus 17

Employee

@RobRue wrote:

Generally, you can deduct interest and taxes on one each second property.

Bob

No, Bob, you are mistaken.

You can deduct property taxes assessed on any property you own, up to the $10,000 cap on all state and local property tax deductions. But you can only deduct mortgage interest on your main home and one second home where you live. A home must have a kitchen and a toilet (among other things). So while an RV loan can sometimes count as a mortgage for the interest deduction, a vacant lot does not.