The federal income tax treatment of interest deductions is often complex and unintuitive.  A recent Tax Court case addressed a number of issues that may be relevant for taxpayers with interest expense on debt attributable to real estate activities.

Cardulla v. Commissioner, T.C. Memo 2023-89, involved a pro se taxpayer who had a number of real estate investments.  In particular, in 2006, a single-member LLC owned by the taxpayer had acquired vacant land along the Salton Sea in California in exchange for a 12-year $1,200,000 note secured by a mortgage on the property.