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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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IF I BORROW MONEY FROM MY FATHER-IN-LAW TO BUY A

Resolved Question:

IF I BORROW MONEY FROM MY FATHER-IN-LAW TO BUY A HOUSE. WHICH WOULD BE A MORTGAGE. WHAT DO I HAVE TO DO TO BE ABLE TO CLAIM THE INTEREST ON MY FEDERAL TAXES?
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

HelloCustomer

In order for mortgage interest to be deductible, your mortgage has to be a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage or deed of trust) that makes your ownership in a home security for payment of the debit. The deed of trust must be recorded under the local laws that apply to where you live. So you would have to sign a deed of trust which shows your father-in-law as the secured debt holder on your home. A title company in your area could help you to prepare this paper work. Once the loan was repaid, he would sign a deed of release.

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Customer: replied 8 years ago.
WHAT DO I DO ABOUT GETTING A 1098 MORTGAGE INTEREST STATEMENT SENT TO THE IRS? WHAT HAPPENS IF MY FATHER-IN-LAW DIES BEFORE THE LOAN IS PAID OFF?