Last year, I bought a 2nd home, but my mom took out a Home Equity Loan on her home and used that money to purchase my 2nd home. I paid her monthly Interest payments, so she did not spend a penny of her own money. (the whole loan was just a temporary thing as I was waiting to sell my 1st home, so I paid off her Home Equity Loan after a few months once I sold my 1st home).
Can I deduct the interest on this Home Equity Loan?
2007-01-22 03:28:04 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
The 2nd home is in my name - I bought it, but used my mom's money from her equity loan. Since the home is mine, and my income paid the interest, I should be able to write it off on my taxes, right? I guess the problem I'm not sure of is if it will cause problems since the loan was not in my name.
2007-01-22 03:57:08 · update #1
Be sure to get this cleared with a competent CPA. But it is my understanding that if you paid interest on a residence, which this home became, that the interest is deductible. Where I'm not sure is during the time that you paid both mortgages, can you double dip? I am not sure about this. But in any case make sure that your Mother doesn't claim the interest as her own deduction, otherwise, there could be an audit, one of you would loose.
2007-01-22 03:33:56 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You cannot deduct the interest on your mother's home equity loan. You were not the owner of the home, nor responsible for the debt.
You mother cannot assign the interest deduction to you.
The interest you paid to your mother was personal interest and not secured by the property. You mother may be able to deduct the home equity interest. She may also need to declare the interest you paid her as income, although there are exceptions for debts to related parties.
2007-01-22 03:35:13 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋
NO: Un-less your mother give you the loan documents information that is in her name. Although it is in her name you can claim the interest and expenses if she passes this right to you.
Make certain that this is done in writing, because both of you can not claim the same deductions.
2007-01-22 03:34:55 · answer #3 · answered by whatevit 5 · 0⤊ 0⤋
Probably not, since the home equity loan wasn't in your name, and the property it was taken out on wasn't in your name.
2007-01-22 05:59:03 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Yes it is possible. Contact a competent tax advisor to show you how.
2007-01-22 03:34:04 · answer #5 · answered by Nusha 5 · 0⤊ 0⤋