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Subject Author Date
What type of interest expense? Craig 02-27-2007
Posted by Craig on February 27, 2007, 8:20 pm
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 LLC ownes land and constructs condo units. In this state
an individual can not own a condo until construction is
completed. Before construction begins LLC sells interest to
prospective condo unit owners. At the end of constriuction
the individual condo units are deeded to individuals.
Individuals are required to fund the land purchase and
construction through LLC contributions--by cash of bank
financing setup through the LLC with personal guaranty of
unit owner. In effect each prospective unit owner is
paying for the construction of his unit without receiving
unit may be rental property or first or second home. What
type of interest is this that is paid on the loan during
this pre-ownership period?

Thanks...jcs

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Posted by Bill Brown on March 1, 2007, 7:25 am
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> In effect each prospective unit owner is
> paying for the construction of his unit without receiving
> unit may be rental property or first or second home. What
> type of interest is this that is paid on the loan during
> this pre-ownership period?

The answer depends on whether the unit is going to be a
primary or second residence or rental property.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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