Is the interest paid on the loan for a lot (with no home on it) deductible as mortgage interest?
Generally, the interest paid on the loan incurred for purchasing a lot is not deductible as mortgage interest.
If you are planning to build a house, you can start deducting mortgage interest once construction begins. The following is from Publication 936, Home Mortgage Interest Deduction:
You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it is ready for occupancy. The 24-month period can start any time on or after the day construction begins. For more information, refer to Publication 936, Home Mortgage Interest Deduction; and Tax Topic 505, Interest Expense.
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