Construction Loan Interest

You can deduct construction loan interest on Schedule A (Form 1040) as an itemized deduction. Even without a Form 1098, you can enter the total interest paid directly into TurboTax by selecting the option indicating you did not receive a Form 1098.

Construction loans can be treated as a qualified home for up to 24 months if you eventually move in and use the property as your primary home.  

To do this, you can:

1. Click on the Search icon at the top right of your TurboTax screen
2. Type 1098 in the search box
3. Click on the link Jump to 1098
4. Your screen will say Did you pay any home loans in 2025? Answer Yes
5. Your screen will say Who's your mortgage lender? Enter it and Continue
6. Your screen will ask Do any uncommon situations apply? Check the box The seller is financing this loan and I did not receive a 1098 and Continue
7. On the screen that says Let's get some info about XXXX now, enter the details and Continue
8. Your next screen says Let's get the rest of your mortgage info, answer and Continue
9. On the screen that says Is this loan secured by a property you own? Answer and Continue
10. On the screen that says What kind of property is this loan for? Answer and Continue
11. Continue through the rest of your TurboTax screens and answer all follow-up questions

See also:

 Home mortgage interest deduction Page 5

Where do I enter my 1098 mortgage interest statement?

Publication 936, Home Mortgage Interest Deduction

Please return to Community if you have any additional information or questions and we would be happy to help.