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Form 1098 shows Mortgage Interest paid.
Was this amount the amount you paid the investor after the foreclosure?
Yes. As I said we have been renting back from the investor. I am in the real estate industry and through contacts was able to broker this arrangement with this private investor so that we can buy our home back for less than 50% of the current market value. The investor is also holding a sizable deposit that will be applied to our future purchase. The home currently in the name of the investor. These payments were rent we paid to remain on our home but the investor has provided us with the 1098 form. Therein lies the reason for my question regarding if we are able to deduct this from our taxes.
There should be no 1098 issued. There is no deductible amount here.
In order to deduct mortgage interest, you must have the loan secured by your main home. You own no home. You are renting. Rents are not deductible.
Same goes with Real Estate taxes. Real estate tax IS deductible for the period you did legally own the property. Any tax paid while you were a renter is not deductible.
That is what I thought. So any idea why they would have sent us that form?
No clue on why people do certain things....