interest writeoff on subject to
This is my first post....When I buy or get the deed to a property subject to....who gets the interest writeoff on the loan....Do I get it?...or the person who's name the loan is in.... 
This is my first post....When I buy or get the deed to a property subject to....who gets the interest writeoff on the loan....Do I get it?...or the person who's name the loan is in....
Al,
Glad to meet you.
Your buyer gets the interest writeoff. The one who makes the payments gets the deduction.
This is another reason I use a Loan Servicing Company (LSC). At the end of the year the LSC sends a statement to my buyer for use by them for on their tax forms.
Unless you like filling out paperwork the LSC is an inexpensive way to handle the paperwork involved with 'Subject To' real estate tranactions.
Welcome on board this board, good first question, might help keep you off Big Brother's hit list.
John $Cash$ Locke
thank you, John
Al,
It depends on how you sell the property. If you sell on Contract then the interest deduction would or could go to your buyer. But if you sell on Lease Option then you would get the interest deduction depending on your current situation along with depreciation
HTH
Hi JR_FL,
Just a quick question of clarification on your above post. Selling on Contract, we all agree the buyer gets the interest deduction. As I understand on a Lease Option, you the seller, would get the deduction until the Option is exercised and the sale takes place. As long as the lease (rental) is going on and the title remains in the seller’s name, then the seller continues to get the deduction. Is this the way you see it?
John (LV)
John (LV),
Thats correct. As far as the option fee goes the seller can claim it in the year they recieved it of wait until the option is either expired or Exercised. Al's post did not clarify on how he was going to sell. Thats why I just jumped to the conclusions. There are ways to disguise your Land Contracts, to mimic all the forms of a lease option but who really wants to go to the hassle.
Last year at an Advanced Stratigies class it was a major part of discussion with people selling on contract and lease option. There are several IRS Rulings regarding dealer status. There was one case in Ga. Where a guy sold all his homes VIA lease option. IRS came back and said...nope its a SALE. They went back and recouped all taxes as it was the year of the sale. So you can see that with proper entity structuring and proper tax planning is very important. I know enough to get me in trouble. Thats why I go to the seminars every year so I can come back and drive my CPA crazy. If you are interested in the case that I mentioned I think its the Kieth case. If I can find the URL I will post it later.