According to the IRS publications on the subject and information I've gotten from various web sites, you can deduct the interest for a mortgage loan taken out to build a home, but only while construction is in progress up to a maximum of 24 months from the start of construction. I have found nothing that says I can deduct the interest on the loan taken to purchase the property on which the home will be built. I have been told by an IRS representative, a CPA and 2 friends who have done this that you can deduct the interest on the loan for purchasing the property and by rolling over the construction loan to a conventional mortgage loan after construction is completed you can deduct the interest on that for the life of the loan, just like buying a house already built. However, nobody -- including the IRS representative -- could tell me where in the tax code or in which IRS publication this information could be found. With the IRS, I don't want to have to say "well, everyone does it".
Does anyone know where in the tax code or in which IRS publication I can find this information? | 
02-07-2001, 03:42 PM
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