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Is raw land tax deductible?

I purchased a lot "raw land" in mid 2007,
I took $68K loan on it.
Can I deduct the Interest am paying ?
(appx. $440 a month)
also what about the property Tax ?
(appx. $1000) a yr.
the property is unimproved.
Thanks in advance...

You didn't state the intended use of the land in your question. If you purchased this only for capital appreciation, then the other answers have dealt with investment interest. The deduction is not limited to the income produced by the land, it is limited to the net investment income from all sources.

If you purchased the land to lease it, or to build rental unit(s) on it, then the interest is investment expense.

You didn't state how you financed the purchase of the land. If the loan is a home equity loan for your existing home, for example, then the interest is deductible as home equity interest up to the limits for this type of debt ($100,000).

If you purchased this with the intention of building your residence, then until you begin construction of your residence, none of the interest on the loan secured by the land is deductible. Once you begin construction, you can deduct the interest expense, with time limits (generally 24 months before occupancy of the home).

All real estate taxes are fully deductible, on the appropriate schedule (A, C, F, E).

This is investment property.

The property taxes are itemizable on schedule A.
The interest paid is investment interest--you get a deduction only to the extent that you have investment income (see for 4952).

You can deduct the property taxes as an itemized deduction on Schedule A.

Since this is investment property, it does not qualify as a primary or second residence you can only deduct the interest to the extent that you realize income on it. Assuming that this is a buy and hold investment for future capital gains you will have to wait until you realize the gain in order to claim any interest expense deductions. You can carry the interest forward until you realize the gain and take the deduction at that time, limited to the gain actually realized.

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