Quick Question For Experts
If a person is on the title of a property, but not on the loan, is that person allowed to take tax write-offs on the property? Or is it just the person who is on the loan who can take the tax write offs? Thanks!
The key is who is LEGALLY obligated to the loan. If you are NOT legally obligated, you cannot take the tax deduction.
what about a person not on title or loan but makes all the mortgage payments? If their any mortgage interest deductions? Cancelled checks can be provided...
That was the case with my son. He was not on title. He was not on loan. He did live in the property, made all payments directly and behaved as if it was his property. He had bank proof of payments and any pertinent info. that it was his residence. I assigned any interest, taxes, etc to him per my taxes and his taxes. That was from 1999 until 2003.
The person legally entitled to claim the deductions gets them (usually the person responsible for paying the mortgage). Better not have two people claiming the same deductions. It will get red-flagged for sure. The IRS is generally incompetent, but they are set-up to find double deductions and unreported 1099/1098 income.
[addsig]
Keep in mind, if this is your personal residence, only the person who lives there can take the deduction. See the definition of qualified residence interest under Internal Revenue Code §163(h)(3).
So for example, if your parents are simply paying the mortgage (writing the check to the mortgage company) on your personal residence to be nice, NO ONE will get the tax deduction.
I am in the same position, but I miscalculated my income by claiming income that was non-taxable. Did you get all your docs. together and look back over the years they say you owe for? Luckily mine is for the past year, have to file an amendment once I feel comfortable in gettin it right this time. Good Luck. I was once audited but ended up paying nothing stand behind what you claimed. God luck, check out some of the free help services by going to your state and the federal govt. tax sites. In the struggle.
Jen
This is exactly the reason that it is dangerous to own property in your own name. You are a target. Best of luck to you.
[addsig]
Seek competent tax advice from an experienced lawyer, CPA or enrolled agent. Your strategy will likely fail and they are familiar with the strategy, but as I said, seek legal advice.