Can our parents transer the tax write off on the loan interest for the home they're renting to us?

Question

My inlaws would like us to buy the house we've basically been renting from them for the last ten years. What other advice can you give us?

Answer 1

You may only deduct interest on a mortgage if you are the person obligated by the mortgage contract to pay said interest. Since you are renting, you are not obligated. Your parents are, and they are entitled to the tax deduction.

If your in-laws want to transfer/sell this property to you, they are entitled to do so, at whatever price they choose. Be aware that they will trigger and incur a gift tax if they sell to you at substantially below current market value of the property.

Seek the advice of an attorney for guidance in the best way to handle such a transfer.

Answer 2

If they are paying the intrest on the loan then it is their deduction. If they would like to be generous they can just give you a portion of their tax refund when it arrives at the end of the year to go towards a down payment and sell you the home at a price that will pay off their loan.

Answer 3

To get the tax deduction you must both owe the tax and pay the tax so if you paid the tax instead of the parents paying nobody would get a deduction. Buy the house then pay the taxes and interest yourself on your own house.

Answer 4

They can't transfer the tax write-off to you until you buy the house from them. I don't think that you can transfer the loan from them to you. You would probably have to go and get approved for a loan yourself.

Answer 5

Whoever, you or your inlaws, regardless of who owns the home, is legally allowed the deduction.

If they pay it and you deduct it, they do not deduct it, the IRS will figure it out and nail you for it. But if you pay it, you can deduct it .

Answer 6

No. Only the home buyer can claim a payment deduction.