I borrowed money to purchase land(1.1 ac) next to my home. A personal loan which incurred interest charges in 2017 & 2018. Can I decduct this interest?

[bjhevey]

Bank was USAA

It was a personal loan.  I was not working at the time and I had just purchased current home with cash and I was expecting a trust settlement.  I did not want to go through the hassle of a traditional bank loan.

Loan amount was $40,000

[HelenaC]

No, you can't deduct interest on land.  The mortgage deduction is for a home and must have sleeping, cooking and toilet facilities.

Here are the other requirements: 

• The loan is secured, which means the lender has some kind of guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
• The home with the secured loan must have sleeping, cooking, and toilet facilities.
• The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) in order to get the full deduction.
• You or someone on your tax return must have signed or co-signed the loan.
• If you rented out the home, you must have used the home more than 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.

Related Information:

• Can I still itemize my deductions?
• Where do I enter my 1098 mortgage interest statement?
• Why didn't my mortgage or property taxes increase my refund?
• Can I deduct mortgage points?
• Can I deduct the property tax or mortgage on a foreign home loan?