How can IRS know if I actually paid or my mom paid the tax and mortgage interest before I was on Deed and Mort

Question

Hi, this is a follow up question to my original.

Most have said I cannot deduct the mortgage interest and property tax that was paid on this property that I was put on deed toward the end of the year.

How can IRS actually know that it wasn't me paying this?

If I provide funds to my mom earlier this year to make her mortgage payments and tax payments, isn't that considered me paying for it?

At the end of the year, the mortgage companies will have both my name and my moms on the 1099 as well as the property tax reciept with both my name and hers since by the time they generate this i will be on the deed too right?

Answer 1

Only the person who is legally obligated to pay the mortgage or tax payment is allowed to take the deduction on his/her taxes. If your name was not on the Mortgage and/or Deed, then you can not take the deduction. If your Mom's name was the only listed and you paid them out of your pocket, then the IRS will consider you a nice child who gave a lovely gift to your Mom, but you can not take the deduction.

Answer 2

Unless you get audited, they won't know, so if you cheat on this you'd very possibly get away with it.

Yes, providing the funds to your mom for the earlier time is you paying it. The problem is that, until you were on the mortgage, you were not required to pay it - and if you aren't required to, it's not a legal deduction for you.

The 1098 will only have one name and social security number on it. Talk to the lender and see if they'll make you primary so yours will be the one that shows. Even if her name and ssn are on the 1098 instead, you would still be able to deduct it, but it could toss up a flag that would have someone looking closely at it.

Again, in all of your questions on this, you've never said whether or not you live in this house. If you don't, you might not be able to deduct the mortgage interest and taxes anyway.

Answer 3

If both names are on the form 1098 you shouldn't have a problem.
if in the prior year only your mom's name was on it, then, to prevent any problems, your mom should have filed a form 1098 in your name (& ss#) as the nominee.

You shouldnt do it now for last year unless they give a hard time for deducting it since it was due the end of feb. instead, for mortgage interest there is a separate line on fed form 1040 sched A line 11 instead of line 10 used when the interest isnt reported on form 1098.
To have proof of who really paid you should pay your mom with a check and keep copy when cashed.

Answer 4

Maybe. The mortgage and tax receipts may be issued based upon deed names at the times of assessment instead of at the end of year. Ask them what they plan to do. And the 1098 can only show one SS number which will be hers. You can still deduct it if your name is on the deed at the time of payment.

Answer 5

If the IRS questions the deduction, they may require you to produce proof of who paid the interest and property tax through bank records - cancelled checks, funds transfer confirmation, etc.