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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55296
Experience:  29 years of experience as a tax, real estate, and business attorney.
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Im a single women with a young daughter and my mom moved in

Customer Question

I'm a single women with a young daughter and my mom moved in with me this year to share expenses. She pays the mortgage directly using her checks and I pay the rest. How does this effect my taxes when I have to file next year? Would it be better for me to pay the mortgage and she pays the rest of the bills? Or should we be more formal and create a rental agreement for the amount of the mortgage and I pay the mortage with the amount she gives me? What way is best to save on taxes? We can be pretty flexible, so do you have a recommendation of a way to set it up?
Submitted: 6 years ago.
Category: Tax
Expert:  Richard replied 6 years ago.

Good afternoon. Yes, it would be better for you to pay the expenses that are deductible and for your mother to pay those that are not. If you do not pay the expenses that are tax deductible, then you cannot take the deductions...unless your mother considers the money a gift to you. If the money balances, I would recommend that you simply pay the tax deductible expenses such as interest and property taxes, and let her pay the others.



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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

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Customer: replied 6 years ago.
What do you mean by gift? How can we set this up? And to what amount?
Expert:  Richard replied 6 years ago.
She can give you up to $13,000 per year under the annual exclusion amount without filing any gift tax return. So, if the amount she is paying is under that, you should just treat the interest she paid on the mortgage as a gift to you, and then you can deduct the interest as if you paid it. :)