Discussion:Mortgage Interest- Not on loan
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Discussion Forum Index --> Tax Questions --> Mortgage Interest- Not on loan
| 19 January 2007 | |
| Client is on the deed but not the loan. Pays all mortgage payments directly. Mortgage is under Mom's name. We can set up a loan to his mom and deduct the interest that way, but is it possible for him to deduct the interest directly even though he's not on the 1098? | |
| January 19, 2007 | |
| I'd say not. Not his debt. And you can only do so with a loan to mom if it's recorded against the property... | |
| 19 January 2007 | |
| I think client may be able to deduct mortgage interest paid (subject to ordinary limitations) based on being legal/equitable owner. Reg ยง 1.163-1(b) | |
| 19 January 2007 | |
| How about asking his mother to add his name to the mortgage. Lendings love having a extra person to go after incase of a delinquency. This will save time and trouble for the 2007 tax year. | |
| January 19, 2007 | |
| I'd suggest you start with "Pegoo has a sense of humor." :-) | |
Death&Taxes (talk|edits) said: | 19 January 2007 |
| As long as it is not a really low interest rate loan and the bank asks to refinance! | |
| 20 January 2007 | |
| SanDiego, Bengoshi gave you the correct answer. The interest is deductible by the equitable owner -- even if he is not directly liable on the mortgage. | |
| 24 January 2007 | |
| Assuming TP can deduct based on being equitable owner, what are the procedures? Deduct on Sch A Line 11 (Home Mortgage Interest not reported to you on Form 1098), and list the lender's (who sent Mom the 1098) name adress , ID #?
Should you expect to get a matching notice from the IRS down the road, and just reply by citing Reg.1.163-1(b)? | |
Seattlemojo (talk|edits) said: | 15 July 2007 |
| what constitutes Beneficial/Equitable ownership?
Does monetary consideration need to be exchanged? If person "A" owns the home (subject to a mortgage) and person "B" moves in and helps to pay the mortgage as well as its share of the utilities and upkeep on the home - though "B" has no financial obligation nor equity, can "B" still claim its proportional share of the interst payments on their ("B"'s) income tax as a deduction on Schd A. "A" and "B" are unmarried, and "B" is on neither the Mortg or the Deed. Thnanks | |
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