Former Owner Cant Handle Payments Anymore
A young lady that got divorced and is renting an apartment now, the house she use to share with her divorced husband she still has it under her name. She can not afford the house payments & is trying to sale it.
As an investor, what shall I present to her?
I want the property, how can I take over payments & get property off her and on me. I have alot of teanants call me about a 3br 2bath house, which I do not have in my inventory. Open to any advice
Sell it to him on contract. Specify in there that the buyer(son) can take tax deduction for interest paid.
Technically, it would have to be his homestead for it to apply, though.
Thanks again Ruman.
Mabe I will call a CPA to see what they have to say. I will post here if I get an answer.
[addsig]
calling a cpa is a great idea.
How far is his home from yours? If its >~35 miles? Can he consider the home your selling him his 2nd home for which expenses are deductable.
Can he buy it and you rent from him making it an investment property.
There are alot of ways to skin this cat.
The IRS allows you to "share" mortgage deduction, even if your name is on the 1098 and on the deed.
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Publication 946
More than one borrower. If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line.
Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. You should let each of the other borrowers know what his or her share is.
I do this by simply copying the 1098 and typing on the bottom, borrower shown it claiming $X,000.00 interest, other borrow is claiming the remaining balance of $X,000.00
[ Edited by dnvrkid on Date 10/15/2007 ]
Do you mean if your name is not on the 1098 or deed someone else can share in the deduction ?, because he is not on the deed or loan at this time. Who would issue him the 1098 ?, or would we use the one the mortgage company issues.
I guess I am a little confuse by your statement, because you said if more than one person receives a 1098 they can share in the deduction, but I am the only one receiving the 1098. I would like to know more.
I am going to see if publication 946 is on line, and read it.
Quote:
On 2007-10-15 23:11, dnvrkid wrote:
The IRS allows you to "share" mortgage deduction, even if your name is on the 1098 and on the deed.
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Publication 946
More than one borrower. If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line.
Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. You should let each of the other borrowers know what his or her share is.
I do this by simply copying the 1098 and typing on the bottom, borrower shown it claiming $X,000.00 interest, other borrow is claiming the remaining balance of $X,000.00
<font size=-1>[ Edited by dnvrkid on Date 10/15/2007 ]</font>
[addsig]
read the fine prine on sharing the deduction:
were liable for and paid interest on a mortgage
Liable for is the key word. The son is not liable.
it would be interesting to see if the note is assumable or just have mom carry back a bunch.
I am not an attorney, but liability can be transferred or shown by a land trust, contract for deed or even a simple lease agreement with equity sharing.
You get your 1098 made out today to RBJJ, so when you get your 2007 1098 for $10K, you claim $3K and then at the bottom add a statement that states RBJJ-SON - SSN - is claiming $7K. You send the 1098 in with both tax returns.
Could liable be a contract from your son that states he will make the payments.