Interest from Private Lender on Flips and Tax Deductions
I hope I am asking the correct question:
If I am purchasing and improving a flip with the following scenario, how would the interest being deducted in terms of when I capitalize on the property? Or am thinking through this correctly:
Purchase Price: 25k
Repairs and all holding cost except Interest =25k
Value and sales for =-100k
Borrowed from the gate 100% of value or 100k @ 12 %
From Purchase on Jan 1 2013 to Sell Dec 31st 2013 or 1 year or 12,000 in interest
Would all of that 12k be able to be expensed towards that property in 2013?
What if that 50k equity that was pulled from it was then used to improve a property that was sold in 2014?