If you are building a house where you bought land and got a construction loan, you can deduct the interest you paid on the construction loan and your property taxes.
Obviously, you can't live in a home while it's being built. Fortunately, the tax law gives you a break here. So long as the home becomes your main home or second home on the day it's ready for occupancy, you can deduct all the interest you paid on the construction loan within 24 months before the home was complete.
If you are building a home with a builder that does not charge you for the home until you close (an "end" loan), then you cannot deduct anything (down payment,etc) until you occupy the home.
The cost of a residence is not tax deductible. If you sell the house one day, you can deduct the cost from the sale proceeds in order to determine a capital gain that you may need to pay tax on. You can only deduct property taxes and mortgage interest as itemized deductions while you are living in the house.
If you are building a house where you bought land and got a construction loan, you can deduct the interest you paid on the construction loan and your property taxes.
Obviously, you can't live in a home while it's being built. Fortunately, the tax law gives you a break here. So long as the home becomes your main home or second home on the day it's ready for occupancy, you can deduct all the interest you paid on the construction loan within 24 months before the home was complete.
If you are building a home with a builder that does not charge you for the home until you close (an "end" loan), then you cannot deduct anything (down payment,etc) until you occupy the home.
Where in the process of filing can you deduct the interest?
When TurboTax Schedule A is fully functioning around 1/17/19, you should be able to enter it as mortgage interest in the Deductions and Credits section of Federal Taxes. If you did not receive a 1098, there should be a place to enter interest not shown on a 1098.
How do we list how much we have paid to the Contractor? 1099 NEC or 1099 Misc or are the parts we paid out of our owner construction loan non reported? We have paid over $600k to the Contractor's business.
The cost of a residence is not tax deductible. If you sell the house one day, you can deduct the cost from the sale proceeds in order to determine a capital gain that you may need to pay tax on. You can only deduct property taxes and mortgage interest as itemized deductions while you are living in the house.
Q. Or are the parts we paid out of our owner construction loan not reported?
A. Yes. Nothing is reported about this to the IRS, either on your tax return or a 1099.
If you are only building your home, you do not issue a 1099 to your contractor. Only businesses issue 1099's, not individuals.
But, as others have said, you keep good records on your cost, for the future. Invoices form the contractor and copies of your cancelled checks should be sufficient.