Question

Investment property under construction in 2021; to be sold in 2022

Forum|Forum|4 years ago
March 27, 2022
1 reply
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I purchased land in January 2021 and had a home constructed on it for investment purposes. It was under construction for the entire 2021 and was completed in January 2022. It is currently under contract.

How do we treat this on our taxes? Is it considered a "secondary home" or "other" when Turbo Tax asks what type of property it is?

Other than real estate taxes and interest, can anything else be deducted in 2021?

When we book the sale, I know commission and staging costs are deductible, are lawyer fees and closings costs as well?

Many thanks!

ColeenD3

Yes, this is treated as a second home. No, the RE taxes and mortgage interest are all that is deductible. Closing costs that you can add to the basis include:

Seller closing costs are made up of several expenses. Here’s a quick breakdown of potential costs and fees: