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Can you claim interest or depreciation on a rental property…

Customer Question
Can you claim interest...

Can you claim interest or depreciation on a rental property if the tenant is a relative and the relative pays the mortgage and interest and insurance?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I bought a house on a 50% down payment along with my daughter and son-in-law paying down the same amount . I am living in the. Home, and also pay the entire house payment,, including principal, interest, and insurance. The loan is in their name. Do they get to claim interest, etc. on their income tax?

Accountant's Assistant: Is there anything else important you think the Accountant should know?

I don’t think so.

Submitted: 4 months ago.Category: Tax
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3/8/2018
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 4 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,620
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello!

My name is***** will assist you today.

Please give me one moment while I review your question and type my initial response

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Customer reply replied 4 months ago
Ok
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 4 months ago

You can claim interest and depreciation if you own the property, legal responsible for the mortgage payments, actually make the payments and you rent the house for profit.

___

If you are on the deed for the home and you pay the actual loan, then you would be the one who is actually able to claim the interest.

Since you use the home as personal property you would not claim depreciation.

____

Please let me know your follow up questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

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Customer reply replied 4 months ago
My name is ***** ***** the deed or the mortgage
Customer reply replied 4 months ago
My name is ***** ***** the deed or mortgage. It is an oral agreement. So am I still entitled to claim anything?
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 4 months ago

Then you are not able to deduct the expenses because you do not own the home.

Previously you stated you bought the house with a 50% down payment?

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,203
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Hello , you requested a different expert.

To be allowed to claim mortgage interest you must be liable to repay the loan. If you are not legally liable and the mortgage is not to secure your main home (that means you also have an ownership interest ) then you are not allowed to deduct the interest and real estate taxes.

Your agreement with them may be allowed for ownership interest but as your name is ***** ***** the loan and the bank would not come to you for payment if the loan was not repaid, you cannot claim the interest.

I sincerely ***** ***** could tell you differently

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

Hello, just checking to see if you responded again

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