How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Stephen G. Your Own Question
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6467
Experience:  Extensive Experience with Tax, Financial & Estate Issues
30050794
Type Your Tax Question Here...
Stephen G. is online now
A new question is answered every 9 seconds

My daughter is abandoning her house which is underwater. Since

Resolved Question:

My daughter is abandoning her house which is underwater. Since the cash invested in the house is mine, I am taking over the mortgage, renovation expenses and plan to rent the house. Essentially the house is now mine.
I plan to do a limited power of attorney re the house.
What do I have to do in order to claim the house income on my schedule E and take depreciation etc."
Submitted: 5 years ago.
Category: Tax
Expert:  Stephen G. replied 5 years ago.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

First of all you would need to get title to the house

Stephen E. Grizey :

Is your daughter going to rent the house from you?

Stephen E. Grizey :

Let me know when you are available to "chat"......

Stephen E. Grizey :

I'm here too.

Customer:

Hello. My daughter is not going to rent the house from me. I am concerned that the bank will not transfer the mortgage to my name. I do have good credit, but I would hate for the bank to call in the loan. We could not refinance at greater than the current value to pay off the current mortgage.

Stephen E. Grizey :

Right. I understand the issues. It is happening all over the country. Generally, the mortgage note provisions would provide the bank the option of calling the loan if title vests in another person, trust, etc. However, the bank's option is to foreclose & they would rather have someone paying on the mortgage. In order to claim the property as your rental property, you must have title. Once that is recorded, you could work out a formal mortgage assumption agreement with your daughter. If you do that, then the bank would need to foreclose on the mortgage as their only other alternative. Of course it would be better if you did this with the bank's knowledge & agreement.

Customer:

Thank you. Let me look at this for a minute and see if I have any question.

Stephen E. Grizey :

ok

Stephen E. Grizey :

Please remember to "Accept", it is the only way we get credit for our work. Feedback, if you have time, and bonuses, where you think they are warranted, are always most appreciated.


 


I'll be happy to answer any follow-up questions you may have.

Customer:

I know this isn't strictly a tax question, but could you recommend a starting point? Should we contact the bank with the plan before investing any money in the project?

Customer:

I do understand re the title must be in my name.

Stephen E. Grizey :

I would request a meeting to go over your plans for the property. You should be prepared to show how the property will support the existing mortgage & how much of an additional investment you plan on making - what exactly are you going to do & why in terms of enhancing the rental income. Then of course you'll need an attorney to draft a deed; etc.

Customer:

Thank you for your answer, Stephen. Nancy Forrest (Customer)

Stephen G. and 2 other Tax Specialists are ready to help you

Related Tax Questions