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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10817
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi, I live in California and Im going to sell my house to

Customer Question

Hi, I live in California and I'm going to sell my house to my brother and he is going to get a mortgage loan to buy it from me, after the sell I'll remain living in the house and I'll be making the payment on the home mortgage loan monthly payment and the property taxes on the house. When I file my federal taxes can I get credit for the home mortgage loan interest and the tax property? my brother is okay for me to do that. Is there a form that we need to file with the tax filing to make it happen?
Thanks in advance.
Submitted: 3 years ago.
Category: Tax
Expert:  Lane replied 3 years ago.

Lane :

Hi so sorry but you’re not allowed to claim the mortgage interest deduction for someone else’s debt. You must have an ownership interest in the home to deduct interest on a home loan. This means that your name has to be on the deed or you have a written agreement with the deed holder(s) that establishes you have an ownership interest. For example, a parent who buys a home for a child that is in the child's name alone cannot deduct mortgage interest paid on the child's behalf.

Lane :

Heres and excellent article from a legal website on this: http://www.nolo.com/legal-encyclopedia/when-home-mortgage-interest-is-not-deductible.html

Lane :

I wonder if were having system problems ... I see you coming in and out over and over...

Customer :

Thanks. How a written agreement with the deed holder that establishes that I have an ownership interest is accomplished? is there an IRS form that we need to file?

Customer :

Thanks in advance.

Customer :

John

Lane :

Ahhh hang on juuust a moment

Customer :

Also, would this agreement be good for both the home

Customer :

the home mortgage loan interest and the property taxes. I'm not sure why the screen keeps falshing, sorry.

Lane :

What it comes down to, more than ownership (or al least as much) is being on hte loan *being responsible for the debt)

Lane :

Hi, just checking back in ... as I never saw you come back into the chat ... But again, just to be sure you saw that last post (the ownership piece can be accomplished through a quit-claom deed or other conveyance of title (which you can attach, once recorded, to the return), nd the other piece is that you arw ON the loan (responsible for the debt)

Lane :

(sorry for the typos) ... again "quit-claim" deed or other conveyance of title and being ON (added to, if need be) the loan itself

Lane :

Hope this helps

Lane :

Lane

Expert:  Lane replied 3 years ago.

Hi John,

... just checking back in here, as I never saw you come back into the chat.


Let me know if you have any questions at all.

Lane