IRS and the Interest Deduction

PawPaw_n_Gram wrote:

jrp wrote:
But since the IRS hasn't provided you a specific reason why they denied your deduction,

The IRS did provide him a specific reason - his 'second home' is the bare land because the IRS received a 1099/98 form.

msmith1199 wrote:
Funny thing is I also paid interest on some bare land I own and that interest was reported to me on a 1099. That interest is not deductible as the land is not improved and even if it was you only get one second home. But the IRS in both letters is giving me credit for that interest as a deduction. And in the letter I sent them I explained that I did not deduct that amount and why, but on the second letter they still left it on.

You are likely going to have to talk to an agent - and explain the 1099/98 for the interest paid on the bare land does not qualify as a second home because there is no home on the property.

That is what is causing the letter and the somewhat automated response.

They show two homes - your main residence and that bare land - so taking a third interest deduction for the motorhome is throwing the red flag.

Secondly - call the lender for the bare land and tell them to stop sending the 1099/98 form.

Thirdly - call your RV lender and tell them to send you that form for mortgage interest on the motorhome.

As mentioned above - when you talk to the IRS, act very polite and confused.

You might have to make a trip to one of their offices to get the whole issue resolved.

You know, I didn't think of that and you may be exactly right. Basically they are trying to pick my second home for me, instead of following the rules and letting me decide which one I get to use for the second home. I know there are people out there who own three or more homes and they get to decide which one gets used as the secondary. Since the IRS received a 1098 for that loan and not for the RV loan, maybe they have decided for themselves that's the one I have to use. I'll see if I can find that out from them.