Loan to purchase 80 acres with an older home on it. Customer plans on constructing a new home on this property within the next few years. They do not plan on using the old home and may possibly be tearing it down. I initially thought I would report as 2nd residence, however, now I am thinking it should possibly be investment. Not really sure and would appreciate any advice.

I think you need more information on what the plans for the current "home" are. I don't think the future construction matters unless your current loan somehow funds it. If the current structure will be used as a home, or held for sale, i'd report it. If they plan to tear it down (i'd want a little more than "we MIGHT tear it down"), use it for storage, etc.......i wouldn't report.

This has been a hot topic over the last few years (the look-forward or look-back thing i guess you'd call it), so if you want support for the opposite view, i'm sure you'll get it.

Oh...i just re-read your question.....my answer is in regards to WHETHER to report or not, not how to report the occupancy.

If you decide to report, then for the occupancy....they either intend to spend time in it as a secondary residence or they don't. If they don't, then you'd have to code it as investment.