Taxpayer Allowed Deduction for "Under Construction" Vacation Home

Forbes.com features an article discussing the case of Rose v. Commissioner in which the Tax Court allowed the taxpayer deductions for a vacation home that had not been built yet. The two issues discussed in the article were: 1. whether the house was considered under construction, despite the fact that construction had not begun, and 2. whether the economic conditions in future years that prevented the construction should deny the taxpayer a deduction for the tax years in question. The Tax Court found for the taxpayer on both issues, and the taxpayer was allowed the deduction.

See Peter J. Reilly, "Real Deductions for an Imaginary Beach House," Forbes.com (Oct. 7, 2011).

Posted by Adam Bair, Associate Editor, Wealth Strategies Journal