In prior years I have been and still is an active investor which I understand means that all interest paid during the year has to be claimed in that year. My question is how can I write off the interest paid in 2001 over several years instead of writing it all off in 2001. Do I need to classify myself as passive investor for the year 2001 in order to amortize it over several years?
If I write it all off in 2001 (maximum deductions of $25,000) I will get a refund equal to the amount of taxes I paid from my employment but I have enough other deductions to get that same amount back. I would like to use a portion of the 35K to offset future income whether it be from employment or investment activity.
I refinanced a property and paid over $35,000 in interest last year, but because I have always filed as an active participant in the management of the property I understand that I cannot spread the interest payments over several years if I file this way for 2001. I am therefore only able to gain only what I have paid in taxes from my employment. How can I get full credit for the total amount paid in interest. Can I file as a passive investor in order to write off the interest payments over the number of years allowed by IRS?
Posted by JHyre in Ohio on February 21, 2002 at 13:21:57:
I’m not quite sure what your question is…do you mean that you are a “passive” investor, and cannot use the property-related interest to offset your outside salary? Please explain!