This is a tax shelter while you’re working (since interest in a mortgage is deductible) and land always appreciates in value over time (even in Arizona :)). When you retire you can sell the land and if you’re over 59 you can skip paying the taxes (this is a one-time benefit). And if you invest in land by buying a home and you live in the home for 2 of the last 5 years, you can keep the gains from the sale of the house tax free up to 250k (500k if you’re married). Go put that into some IRA’s and life will be gooood come retirement age.
January 29, 2003
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Hi,
My comment is that the interest on borrowed money paid for vacant land is only deductible from interest income from other qualified investments. One cannot just deduct the entire amount on a straight dollar amount on your tax forms. I also believe that this is not part of the itemized deductions that we are totaling to compare with the allowed standard deductions (one can take the higher deduction). If I am wrong here, I would like to know. Thanks.
Comment by bill callahan — July 30, 2007 @ 2:42 pm