Naila Ahmad Posted February 27, 2008 Report Share Posted February 27, 2008 My client owns two houses. none of them is a rental property. My client lives in one house and her parents reside in the other. parents pay the mortgage and property taxes on the house they live in, but the loan is in my clients name and her S.S # is on the 1098 form. My question is , can she take the deduction for mortgage interest and property taxes for both the houses, if yes how she will report this deduction on schedule A. If not, can her parents take this deduction even though their name and S.S # is not on form1098. Any help will be appreciated. Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted February 27, 2008 Report Share Posted February 27, 2008 No and no. 1. Must be on note to deduct. Parents not on note. 2. Must pay interest to deduct. Child did not pay. 3. While is not the payments made by the parents not rental income to the child? Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 27, 2008 Report Share Posted February 27, 2008 Yes. Child can claim mortgage interest for the house where he lives in on regular sch A. Are you sure he owns two houses or he let his parents use his good credit for the second house? Quote Link to comment Share on other sites More sharing options...
Maribeth Posted February 27, 2008 Report Share Posted February 27, 2008 Or the parents gift the amount of the mortgage payments to the child every year. The child takes the interest deduction. Maribeth Quote Link to comment Share on other sites More sharing options...
jainen Posted February 28, 2008 Report Share Posted February 28, 2008 >>the parents gift the amount of the mortgage payments to the child every year<< A gift is when you don't get anything in return. These folks get housing. You can say the expense offsets the income in this below-market rental, or you can say the taxpayer incurs neither expense nor income, but you can't say he gets the deduction without any income. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted February 28, 2008 Report Share Posted February 28, 2008 he gets both he can own 2 houses and he can house his parents. but the parents shouldgive the money to him and he should pay all expenses. you are allowed 2 homes and you are allowed to house your parents. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 28, 2008 Report Share Posted February 28, 2008 I did one today and I included both interest and taxes on both houses. My client told me, I pay for both mortgages and my parents pay only utilities. His salary was enough to cover both mortgages so I didn't see a problem. Quote Link to comment Share on other sites More sharing options...
fredazcpa Posted February 28, 2008 Report Share Posted February 28, 2008 take a look at TR 1.163 see if this applies, maybe the parents have a benfical interest, there are a number of court cases for this one were the courts have ruled that a benifical interest can take the deduction Quote Link to comment Share on other sites More sharing options...
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