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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10131
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I rent a house to my son the mortgage payment including

Customer Question

I rent a house to my son for just the mortgage payment including taxes. I can not claim interest and taxes can he?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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The answer, so sorry, is generally no.

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the two major hurdles you have to jump over to qualify forthe deduction:

  1. You must have secured debt on a qualified home in which you have an ownership interest.
  2. You must file your federal income taxes using Form 1040 and itemize deductions on Schedule A.

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Expert:  Lane replied 1 year ago.

Now, there is a rare exception to this called "Beneficial ownership." Where you can make a case that SUBSTANTIALLY your son has all of the benefits and burdens of ownership.

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But it might be simpler just to gift the home TO him.

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Expert:  Lane replied 1 year ago.

Here are some final tips that can help protect you in the event of an IRS tax audit:

  • If you co-own a property and are not listed on the mortgage, never make monthly payments to a co-owner because that could be construed as paying rent. Instead, make payments directly to the lender so your ownership interest can’t be questioned.
  • If you co-own a property but aren’t named on the deed, have your ownership interest clearly defined in a written contract.
  • If you pay someone else’s mortgage debt for them, you can never deduct the mortgage interest unless you are indebted as an owner of the property.

Hope this helps...

Lane

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Please let me know if you have questions from here...

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If this HAS helped, and you don't have questions, I'd appreciate a positive rating (using the stars or smiley faces on your screen) ... that's how we're credited for the work here)

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Expert:  Lane replied 1 year ago.

I hope you'll rate me positively, using the stars on your screen … (that's the only way we get credit for the work here) … based on thoroughness and accuracy, rather than any good news/bad news content

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That's the only way JustAnswer will credit me, with a portion of what you paid, for the work here ... but again, let me know if you need more

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Thank you,
Lane