Thinking of buying a plot of land and building on it later. Currently renting now. No tax breaks at all now.
2007-04-08 10:17:39 · 4 answers · asked by tklines 3 in Business & Finance ➔ Taxes ➔ United States
If the property is handled as an investment, you will be able to deduct all kinds of expenses associated with acquisition and eventually improving it. You have to file more than just the 1040, and use a CPA to get it right. You may want to form a separate entity like a LLC and carry expenses forward to offset the income from the property in future years. The investment purpose must however be real, not invented just to evade tax.
2007-04-08 10:36:31 · answer #1 · answered by Anonymous · 0⤊ 3⤋
How soon do you expect to build? If you start construction, and will be able to move in within 2 years, it can be treated as a residence. If not, it is an investment property.
2007-04-08 20:27:07 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
The only thing you would be able to write off would be the real estate taxes you are paying on the land, and that would only be if you itemize.
2007-04-08 17:24:25 · answer #3 · answered by Anonymous · 0⤊ 1⤋
No. All of the acquisition costs go into the basis of the property.
2007-04-08 17:31:55 · answer #4 · answered by Anonymous · 0⤊ 0⤋