Land Buying Tax Question
I have an opportunity to buy some land that I can subdivide and build on. Let's say I buy on 1/1/05 but do not start building until 1/1/06, can I write off as a tax loss the mortgage interest , insurance and taxes I paid in 2005?
Best to consult with a CPA who is intimately familiar with tax treatments for land developers.
My first impression would be to say no, your expenses are accrued until the developed property is sold and then included in the cost of goods sold.
But, my opinion is just that and worth every penny you paid for it.