When is the interest paid reported

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3 posts by 3 users

Shanequa J.

SFR Investor from Houston, Texas

Dec 29 '12, 09:34 AM

Home Depot and Lowes sometimes offers 0% interest in paid in full within a certain time frame. Let's say I financed something when the offer was not available. How would I report the interest paid in 2012 when the property will be placed into service in 2013?

Second question. How do you report mortgage interest paid in 2012 when the property will be placed into service in 2013?

I read Every Landlord's Tax Deduction Guide that was suggested by many on the site and those two things were not discussed. Pre rent ready repairs and improvements can only start to be depreciated once the property is placed into service. How is credit card and mortgage interest deducted before the propery is placed into service?

Austin S.

Banker from Sterling, Colorado

Dec 29 '12, 02:07 PM

Interest is an expense and will be deducted in the year it is incurred. When the asset is placed in service only deals with depreciation. Please get help from an attorney, CPA or enrolled agent with all tax matters.

Steven Hamilton II Verified Moderator

Real Estate Investor from Lake Villa, Illinois

Dec 31 '12, 02:30 AM
1 vote

@Shanequa J.,

Credit card interest You will report that simply as an interest expense on Schedule E except when paid before placed in service.

You can either capitalize it and add it to basis or you may deduct it as investment interest on Schedule A Form 4952. If it had been placed in service later in that year you would include it on the same Schedule E.

Here is a thread on the topic:


Medium_hta_logoSteven Hamilton II, Hamilton Tax and Accounting
E-Mail: [email protected]
Telephone: (224) 381-2660
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-Steven the Tax Guy Hamilton Tax and Accounting LLC (224) 381-2660

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