We are purchasing land and we have a contract of deed. We pay monthly on the land, can we deduct the interest if we do not have 1098 from the seller.

[dandk91709]

We live on the property now, we have never received a 1098 from the seller.  But the interest is 12% for 10 years.

[PaulaM · Accepted solution]

Maybe.

If you plan on building a home on it, you can claim the interest if the home is completed within 24 months. If this is your case, then you would include it in the mortgage interest section as if you did receive a form 1098. The interest would be recorded in box 1.

If the land is just for personal use, then the interest would not be deductible.

Interest on land purchased for investment or business use is deductible.

See links below for reference.

https://www.irs.gov/pub/irs-pdf/p936.pdf

https://ttlc.intuit.com/questions/2957158-can-i-claim-the-interest-on-my-land-loan

https://pocketsense.com/loan-interest-land-deductible-8490567.html

[dandk91709]

Great thank you

[PaulaM]

You are welcome 🙂