To qualify as avoidable interest,the interest must arise from borrowing that is directly linked to a construction loan.

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Avoidable interest refers to the portion of interest expense that could have been avoided if expenditures for the asset had not been made. It is not limited to interest from loans directly linked to construction but can also include other borrowings, as long as the funds are used for the purpose of acquiring or constructing a qualifying asset.

To Qualify as Avoidable Interest,the Interest Must Arise from Borrowing