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Discussion Forum Index --> Tax Questions --> CAPITALIZED MORTGAGE INTEREST
DLDTAXQS (talk|edits) said:
| 3 October 2006
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| FRIEND'S CORPORATION CONTRACTED TO BUILD A FREE STANDING BUILDING IN 2004. THE CORPORATION BORROWED CONSTRUCTION FUNDS FROM LENDER TO BE PAID AS DRAWS. ESTIMATED COMPLETION TIME WAS ABOUT 6 MONTHS SO EXPECTED CERTIFICATE OF OCCUPANCY IN 2005. INTEREST PAID IN 2004 WAS CAPITALIZED AS C.O. HAD NOT BEEN ISSUED. SEVERAL THINGS HAPPENED. HURRICANE FRANCIS AND HURRICANE JEANNE HIT THE AREA DIRECTLY IN 2004. CONSTRUCTION WAS SET BACK FOR AN EXTENDED PERIOD. THE CONSTRUCTION WAS NOT COMPLETE AT THE END OF 2005. HURRICANE WILMA SIDESWIPED THE AREA (100+ MPH WINDS)CAUSING A SLOW DOWN AGAIN IN CONSTRUCTION. IN FACT THE C.O. IS EXPECTED TO BE ISSUED OCT 31, 2006. QUESTION IS: DOES 2005 MTG INTEREST HAVE TO BE CAPITALIZED ALSO? IS THERE ANY CIRCUMSTANCE THAT WOULD ALLOW INTEREST PAID DURING THIS TIME TO BE EXPENSED? TAX EFFECT IS THOUSANDS OF DOLLARS.
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Taxnfp (talk|edits) said:
| 4 October 2006
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| Check out several revenue proceedures if this property is in the Wilma GO ZONE.
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DLDTAXQS (talk|edits) said:
| 6 October 2006
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| YES PROPERTY IS IN THE WILMA GO ZONE BUT CANT FIND ANY REFERENCE TO CAPITALIZED INTEREST. ANYTHING ANYONE CAN PROVIDE TO MY SEARCH?
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