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Tax Law (Questions About Taxes)/Ineterst on Construction loan

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Expert: John Stancil, CPA - 2/1/2005


Question
I am married with no kids. In year 2004 I got my new house constructed for which i took a construction loan. I paid about $3500 as interest in year 2004.
I was wondering, what is the best way to show this interest in the 2004 taxes. I do not have too any other deductions to make use of the Itemized deduction.

Basically my question is that, is there any way to show the interest payment as expense while using standard deduction, if not what is the other options that is have.


Answer
Sam,

Thanks for your question.

You have no other options.  Interest expense is an itemized deduction and cannot be taken anywhere else on the tax return.  The only exceptions are 1. Interest incurred in a business context and 2. Student loan interest.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 35 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com. Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CGMA, and CFM. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 30 years and have taught accounting and tax at the college level for over 30 years.

Organizations
AICPA, FICPA, IMA, NATP

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

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