Tax Write Off Help?
I recently just purchased a property. My friend wants to go in on half. I would put him on title but would not refinance the house because my rate is good. Can he still write off the mortgage interest and other house deductions?
Thank you,
Matt
No. Not unless he pays them. He who pays the mortgage interest and property taxes is entitled to write off the mtg interest and property taxes -- IRS.
Da non-lawyer Wiz
[addsig]
Thank you mtnwizard.
So as long as he can prove he is paying the mortgage and other household expenses he be able to take 50% of the write off?
If your friend wants to go in on half, will he share in half of all the expenses of acquisition (closing and settlement costs) to include downpayment?
How about repairs and maintenance?
If the answer to both questions is yes, then add him to the title as a co-owner when he pays you his share of the buy-in. After that, all he needs to do is pay his half of the mortgage payment each month, as well as half of the property taxes and hazard insurance premium if they are not escrowed.
The loan will stay in your name and you will get the 1098 mortgage interest statement at the end of the year. Just give a copy to your "partner" and tell him that half is his deduction.
Thank you
New Kid and MtnWizard. You have been very helpful.