Discussion:BUYING HOUSE WITH FAMILY MEMBERS
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Discussion Forum Index --> Tax Questions --> BUYING HOUSE WITH FAMILY MEMBERS
| 20 February 2009 | |
| It may be a complicated situation but interesting and need wisdom from you.
I am living in a house with my father-in-law and sister-in-law's family. It's 1.2mm house and the facts are as follows: My family - live on the 1st floor, has zero equity Father - live on the 2nd floor, put in 300K for down payment Sister - live in the basement, put in 200K for down payment on the paper, the owner of the house is my father-in-law and we took out $700,000 mortgage. But our family decided that each family has 1/3 ownership of the house, which translates as follows: my family - responsible $400,000 mortgage Father - responsible $100,000 mortgage (400k-300k) Sister - responsible $200,000 mortgage (400k-200k) so when we receive bill for mortgage payment, each family pays by the ratio. If mortgage payment is 7k, my family pays 4k, father pays 1k, sister pays 2k. we have been operating this way and I have been tracking principal and interest for each family using loan manager software. When we receive 1098, each family claims their mortgage interest amount on Schedule A based on the schedule I have been tracking of, which agrees with the number on 1098. My question is 'Is it ok to do this as long as I keep all the payment records?' If this doesn't sound right, what is the best way to handle this situation in terms of tax? Thank you for reading this situation and welcom any opinions or ideas. Thanks. | |
| 20 February 2009 | |
| Riley2 and Kevinh5,
Yes. I am a CPA but work in a different industry. That's why I need some help on this issue. I do not know how IRS looks at this situation... Thanks. | |
| 20 February 2009 | |
| Have you considered forming a legal partnership? If the house is in your father-in-law's name, he can sell it without informing you and keep all the proceeds. This doesn't sound like a good arrangement to me. | |
| 20 February 2009 | |
| Question: "Buying House with Family Members"
Answer: I take this to mean you are buying a house with family members thrown in to sweeten the deal. Duh, No! This is illegal. I'd sell blood before I threw in a family member as an inducement. On the flip side, no, you can't buy people. Go to Kuwait or somewhere if you want to do that. | |
| 20 February 2009 | |
| You're a CPA, you should be savvy enough to get this agreement in paper. I'd strongly advise it. | |
| 20 February 2009 | |
| in today's real estate market, CrowJD, I think that you have to agree to take on some of the buyer's family members in order to sell the house. I understand that in days gone by seller's would have to carry a note in order to sell a house. Now you've got to carry the brother-in-law. | |
| 20 February 2009 | |
| so that's what he means - I'll buy your house if you'll take some of my family members. | |
| 20 February 2009 | |
| Sorta. A big strapping six footer to mow the grass, and paint the shutters is what I had in mind. I've asked for that many times, but I've had to settle for the window treatments instead. | |
| 20 February 2009 | |
| that'd be the wife and she's a keeper. the brother-in-law just sits around watching TV, drinking beer, and smelling up the room so bad that even the dogs get up and go to the other room. but if you'll take him off'n my hands, I might just be looking to buy a house. | |
