Brother initially borrowed $92, 000 and then paid us paid the $92,000 plus interest of $8,000 that accrued on the loan to repay our equity loan of $100,000 during 2006. We received a 1098 Form for interest paid credit/deduction. Do we get to claim the $8,000 interest or does he?
2007-02-07 06:02:09 · 6 answers · asked by melissa m 1 in Business & Finance ➔ Taxes ➔ United States
You claim the deduction because the loan was against your home and the debit was in your name, the $8000 interest your brother paid was to the mortgage company not you so this is not interest income to you. You took a great risk, it's a good thing your brother is trustworthy.
2007-02-07 06:34:07 · answer #1 · answered by DaLab 2 · 1⤊ 1⤋
You can claim the interest paid on the loan that you took out and received a 1098 for. You must also provide your brother with a 1098 statement for the mortgage interest that he paid to you so he can claim that as well. You will also have to claim this interest income that you received from your brother. If you did not make any money on the transaction it will be a wash but still reportable.
2007-02-07 14:19:27 · answer #2 · answered by dancing11freak 2 · 1⤊ 0⤋
You claim the deduction but also need to report the 8,000 he paid you as interest income. This will wash out so no change to your taxable income.
2007-02-07 14:06:48 · answer #3 · answered by spicertax 5 · 2⤊ 0⤋
If it is in your name...You do....
I have some "owner carry" properties I am carrying the notes on for people...They way my accountant does that is I claim the interest I paid...I also claim the interest they paid to me...(it washes out)...Then my tax guy gives them a statement so they can claim the interest they paid....i am not sure you should check with an accountant if you want to get that involved..ss
2007-02-07 14:06:12 · answer #4 · answered by Littlebit 6 · 1⤊ 0⤋
You do. If you feel guilty about this, you can offer him a personal rebate. (but not through tax filings).
Say you are in the 25% tax bracket, the interest deduction will be worth $2K to you. Maybe you could split it, give him $1K as a rebate and keep the other $1K for your efforts.
Seems fair to me.
2007-02-07 14:08:22 · answer #5 · answered by muskrat_h8r 2 · 0⤊ 1⤋
You get the deduction for the interest paid on your HELOC. The HELOC was secured in your residence.
2007-02-07 14:06:45 · answer #6 · answered by jseah114 6 · 0⤊ 2⤋