Vacant Unimproved Land - Deductible Expenses

Feb 23, 2008 5 Replies

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MDinDestin 18 years ago

I purchased an inexpensive unimproved city lot in another town for cash.

My hope was to be able to deduct mileage and lot maintenance expenses associated with the management of the parcel on my personal taxes.

IRS Publication 550 appears to list the rules for investments of this type and indicates I can NOT dedcut expenses unless they exceed 2% of my adjusted gross income - which they don't. Am I analyzing this correctly?

I'm assuming I can at least deduct the real estate taxes regardless. Is that correct?

I itemize since I have other property that generates a loss for tax purposes.

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Bill Brown 18 years ago

Yes. Real estate taxes are deductible in the taxes section of Schedule A.

Huh?

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Harlan Lunsford 18 years ago

(snipped....)

Could you perhaps expand on this? What type of expenses generate the loss and how are they reported?

ChEAr$, Harlan Lunsford, EA n LA

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Stuart Bronstein 18 years ago

If it's investment property, can he deduct mortgage interest?

Stu

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Harlan Lunsford 18 years ago

A rhetorical question, eh Stu?

If this mortgage interest is investment interest and he has sufficient investment type income, then yes, to the extent of that income.

(grin)

ChEAr$, Harlan Lunsford, EA n LA

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Stuart Bronstein 18 years ago

Well, I'm a rhetorical kind of guy.

Smile when you say that, Pilgrim.

Thanks.

Stu

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