Home construction loan?

Forum|Forum|7 years ago
June 5, 2019
5 replies
30 views

How do I treat home construction loan interest if I pay it but then get reimbursed that amount by the builder (until construction is complete)? Do I just ignore it since it is a wash? Or do I claim the interest as a deduction and then have to report the reimbursement as income?

TurboTax Deluxe Windows

Best answer by MichaelL1

I would treat it as a wash.

For one thing for mortgage (construction loan) to be deductible, you have to itemize on your taxes, and with the new increased standard deduction of $24,000 for married couples, you may not be able to do that.

Just keep good records for your tax file, for whatever you decide to do.

Anonymous

whose name is the loan in? who has title to the property?

colkenmorAuthor

Level 2

Loan is in my name and wife's name; we have title to the property (had to close up front before construction began)

MichaelL1Answer

Level 15

I would treat it as a wash.

Just keep good records for your tax file, for whatever you decide to do.

TomYoung

Alumni - Champ

Of course if the builder issues you a 1099-INT, and they might, then you're pretty much forced to report that income and take the itemized deduction, which may or may not be of any benefit if the standard deduction is higher.