Taxation on new construction with private money

[Lucas Amuchastegui]

Hey BP,

I'm starting a new construction project with my brother, and have a couple questions about our tax strategy. I know that we'll need a CPA to get official advice, but I'd like to have a general idea of how it goes before going into that meeting.

1) There are a lot of expenses not relating directly to the construction of the home, such as permits, construction of utility lines, tree clearing, surveying, etc.. Can I write these off my personal income this year, or do I have to treat them some other way? We're also having a spec builder build the house from foundation to finish. How do we handle that bill at tax time? I'm assuming a cost segregation depreciation if our builder can give us that sort of breakdown...

2) My brother and I are doing this as 50/50 partners. Is it legitimate to simply split expenses and earnings on our taxes 50/50?

3) Our parents are funding the deal (don't worry, we have all the necessary legal documentation in place). I'm assuming that it's no problem to still write off that interest as if it had been paid to a bank. Is that correct?

Thanks so much!

Luke