Answer

Hello again pilotgirl,

Thank you for the clarification.

Your fiance can continue to deduct the mortgage interest and property taxes that he pays on his home. He does not actually have to live in the home to deduct those expenses and he does not have to own a second home.

However, he may lose the homestead exemption in FL, if he is not the one who is actually living in that home as his primary residence, and this would result in paying a higher property tax rate.

I assume that it is your intention to just have this be an even swap between the father and son as far as any income or expenses, and that you do not plan to report receiving rental income from the son. If you do plan to report receiving rental income, then of course you would be liable for tax on the net rental income you report after expenses. For that reason, just having each person continue to pay their current expenses would be the most tax advantageous for you.

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Thank you pilotgirl.