Posted by JOHN K HASLACH, CPA MST on May 19, 2004 at 12:56:34:
Hi Wayne,
Net investment income includes interest, dividends, annuities and royalties. It does not include qualified dividends or net capital gains unless you choose to include them. By choosing to include them in investment income, they are not eligible for the lower tax rates of qualified dividends or capital gains. Any investment interest expense not currently deducted, is carried forward and deducted when you have investment income.
Interest deduction on investor land? - Posted by Wayne-NC
Posted by Wayne-NC on May 18, 2004 at 20:44:56:
Raw land that is purchased for appreciation purposes is mortgaged. Is the interest that is paid deductable against other income?
Re: Interest deduction on investor land? - Posted by JOHN K HASLACH, CPA MST
Posted by JOHN K HASLACH, CPA MST on May 19, 2004 at 07:55:03:
If the property is held for investment, the interest would be subject to the investment interest expense limitations and would be deductible against investment income.
Re: Interest deduction on investor land? - Posted by Wayne-NC
Posted by Wayne-NC on May 19, 2004 at 09:51:58:
Hi John, Thanks for the info, but let’s look at a couple senerios and make a few assumptions. First, there is no investment income because it is all land. The other expense obviously are the property taxes. Would this interest deduction offset to some extent the capital gains earned from other previous or future investment sales? If so, what are the limitations? Second, if current income is only interest, what effect would that have?