cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

Interest deduction on construction loan

I lived in one house, while building another. I then sold the old house and moved into the new one in October. Can I deduct the interest on the construction loan while my new house was being built?
1 Best answer

Accepted Solutions
Employee Tax Expert

Interest deduction on construction loan

Yes you can deduct the interest on your construction loan if the loan was secured by the property you moved into. 

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 date that construction begins.

See page 4 under Qualified Home and Home Under Construction: https://www.irs.gov/pub/irs-pdf/p936.pdf

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

3 Replies
Employee Tax Expert

Interest deduction on construction loan

Yes you can deduct the interest on your construction loan if the loan was secured by the property you moved into. 

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 date that construction begins.

See page 4 under Qualified Home and Home Under Construction: https://www.irs.gov/pub/irs-pdf/p936.pdf

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

New Member

Interest deduction on construction loan

We paid interest on a construction loan last year and I was curious where I report that on my taxes? The bank sent me a statement showing how much interest we paid but it is not a 1098, so I don't really know where I document it on my turbo tax forms. Thanks for your help

Employee Tax Expert

Interest deduction on construction loan

You don't need Form 1098 to report mortgage interest.

 

As long as you have the information you need, you can enter the mortgage interest into TurboTax.

 

You can get your mortgage info by going to your lender’s website. Other documents, like your monthly mortgage bills and your Closing Disclosure (or HUD-1), will also have some of this info.

 

Aside from the amount of interest you will need to know the: 

  • Outstanding mortgage principal as of 1/1/2019
  • Mortgage origination date
  • Mortgage acquisition date

@ckellerman01

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"