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This is the only property (in addition to my primary residence) that I have owned in the last 10 years. My guess is that doesn't put me in the business category.

I'd have to agree.

I have owned it for 1 year and 7 days.

So you knew about the long-term holding period?

It is only property so no improvements or any other additional investments.

By "only property" I am guessing you mean that it is land with no structures on it.

The homeowner fees arise out of the fact that the property is part of a larger planned community that requires quarterly homeowner (really property owner) fees.

Those would be investment expenses, deductible as miscellaneous itemized deductions subject to the 2% of AGI threshold.

I never really understood why the utility stuff was listed separate at the time of purchase but it was significant and obviously I had to purchase it.

Because they can. I would take that as part of your basis in the property.

I also assume that interest payments on investment property mortgages are not tax deductible.

Bad assumption. That would be investment interest (much like margin interest). It's deductible, but only to the extent you have investment income. Any disallowed investment interest is carried over to following years. The investment income does not need to come from the investment property that generated the interest expense. IOW, you can use your taxable interest or dividends as investment income. You can also use the gain on the sale of the property as investment income, but you would have to give up the lower tax rate for the long term capital gain. That may or may not be to your advantage, depending on your specific situation.

And as to the realtor's commission - that is definitely a selling expense and will reduce your gain on the sale of the property.

--Peter
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