The short answer is Maybe.
Investment
Property
If you borrow money to buy property
you hold for investment, the interest you pay is investment interest. You can
deduct investment interest subject to certain limits. Generally, your deduction
for investment interest expense is limited to your net investment income.
You can carry over the amount of
investment interest you could not deduct because of this limit to the next tax
year. The interest carried over is treated as investment interest paid or accrued
in that next year.
To deduct your investment expenses, you must itemize deductions on
Schedule A (Form 1040). Enter your deductible investment interest expense on
Schedule A (Form 1040), line 14. Also
attach a completed Form 4952 if you used that form to figure your investment
interest expense.
In TurboTax you can enter it under Deductions
and Credits > Retirement and Investment > Investment
Interest Expenses.
You must also complete a Form
4952- Investment Interest Expense Deduction.
http://www.irs.gov/pub/irs-pdf/f4952.pdf
http://www.irs.gov/pub/irs-pdf/p550.pdf
Property you
bought to build a home on
You cannot deduct interest on land that you intend to build
a home on, but some interest may be deductible when construction begins. You
can treat a home under construction as a qualified home for a period of up to
24 months, but only if it becomes your qualified home at the time it is ready
for occupancy. The 24-month period can start any time on or after the day
construction begins. As a qualified home, the interest paid within certain
limitations may qualify as deductible mortgage interest.
