The interest could be deductible--it depends. If the land is deemed investment property, you may be able to deduct it as investment, assuming you have investment income. If it is to be income-producing property, it would be deductible once rental property were constructed and placed on the rental market. No particular paperwork needed in these instances. If, however, you intend to use this for your personal residence or vacation home, the interest is deductible, again once construction is done. You'll need to have a note and deed of trust recorded at the local register of deeds office for the interest on the loan to qualify for deduction.
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