I am making payments on a loan (principal and interest) where and how do I deduct?
Principal repayment of a loan is never tax-deductible.
Business interest
expense is an amount charged for the use of
money you borrowed for business activities.
You can generally deduct as a business expense all interest you pay [or accrue, if you use the accrual method of accounting] during the
tax year on debts related to your trade or business. Interest relates to your trade or business if
you use the proceeds of the loan for a trade or
business expense. It does not matter what type
of property secures the loan. You can deduct interest on a debt only if you meet all the following
requirements.
You are legally liable for that debt.
Both you and the lender intend that the
debt be repaid.
You and the lender have a true
debtor-creditor relationship.
If you are self-employed and file Schedule C to report your business activities, non-mortgage business interest is reported in Part II, Line 16b.
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