Discussion:Who can take itemized deduction? Mom or daughter
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Discussion Forum Index --> Tax Questions --> Who can take itemized deduction? Mom or daughter
| 27 May 2007 | |
| Daughter owns condo. Mother transfered condo to daughter. Daughter has 16000 of interest income.Mom and daughter live together.
Daughter is in process of buying a new condo. Mom pays for everything. The new condo will be in daughters name. If mom pays for the interest and real estate taxes could that be legally deducted on mom's return. It would be the most tax benefit. If mom co signs the loan would that be an option. | |
TaxAssistCPA (talk|edits) said: | 27 May 2007 |
| For mom to deduct the taxes, she would have to be owner of the property. To deduct the interest, mom would have to own and have a recorded mortgage in her name. Of course, they could co-own and share the deductions pro rata.
By the way, mom really shouldn't have transferred to daughter (if she has owned for a long time). It would have been better for daughter to inherit and get stepped-up basis. | |
Taxea@hawaii.rr.com (talk|edits) said: | 27 May 2007 |
| Caryncpa...I would suggest that you take tax courses this year to meet your continuing education requirements. I'm not being snooty but this is relatively basic to an EA or CPA who has kept up with individual income tax law. taxea | |
| 28 May 2007 | |
| Caryncpa - If you can, this would be a good time to do some planning with regard to the exclusion of gain on future possible sale of the condos, in terms of the 2 year ownership and residency requirement. It would be a shame to miss out on the $250K exclusion in the event of future sale, when it could have been protected via correct titling of the property. | |
| 29 May 2007 | |
| I am in agreement with you. The property should have not been gifted . However I was not aware of these facts.The condo was transfered in May of 2004. She is now selling in 2007.
She meets the 250k exclusion. I realize there needs to be ownership of the propery to deduct the interest and real estate taxes. I was wondering if their was perhaps a loop hole because the mom lives with the daughter and in lieu of rent pays her taxes and her mortage. ??? | |
Taxmaster70 (talk|edits) said: | 29 May 2007 |
| I agree with TaxAssist, no way mom can deduct taxes and mortgage other than how he listed. If mom is paying daughter rent, daughter may have to do a Schedule E. When mom transferred condo to daughter, were gift tax consequences considered? | |
