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Long backstory that I will spare you the "whys" of as it's irrelevant to the question.
I'm on the title to my house but not on the mortgage. My grandmother is on both title and mortgage (mortgage is solely in her name).
I make the payments (have from day one)...and for most of these payments I have proof in the form of canceled checks.
Can I deduct mortgage interest at tax time if I am not on the note? Is it even worth the bother if you're under a certain income level? Neither of us have deducted it so far... surely one of us should be I am thinking...?
Second, can I be simply "added to" the mortgage loan just like you add someone as an authorized user to your credit card or is there more to it than that?
Obviously I want to get the mortgage into my name and release my grandma from it entirely but how? My credit is not yet mortgage worthy. Do I need to wait a bit or is there some other way since I've been making all the payments, made the down payment, and have proof of all that?
With my first house my folks co-signed and were on title and note. They didn't need the tax deduction and I made all the payments, so I took the deduction. I don't think the IRS cares who's on title. They need to be ableo to match up the mortage interest statement with who's filing the tax return. If your name ain't on that mortgage int. statement, you might be playing with fire.
I would wait a bit. I agree you are not on the mortgage interest statement. Make sure you grandmother is getting the deduction though. Someone needs to get it if it will make a difference - you can "gift" so much money to your grandmother a year and that "gift" could be the mortgage payment - it's all yours in the long run.
Where it could get dicy is if your grandmother winds up needing to go on medicaid because nowadays they *will* take the house if need be if she is not alive and living in it and maybe be considered "her" house. Gone are the days of "distribution of assets before qualifiying" If her financial situation is such that she may wind up on medicaid you may want to talk with an attorney NOW because all your money could go down the tube unless things are written clearly - "gift" vs "loan" etc all gets crazy, too much for me to interpret.
As long as your name is on the note and it was legally filed with the county, you can take the deduction. The reason I mention "legally filed" is because sometime relatives will loan the money with the intention it's your home, but if the proper documents aren't filed with the County, you can't use the write off....
I am on my daughters loan note, but she is on title and makes all payments, so she gets the tax write off.
As far as gifting the house, have her leave her half to you in her trust. If she gifts her half to you while she is still alive, the tax man will be knocking on your door and want lots of money. If she wills it to you, NO TAX...!
I think you should talk with an attorney in your state about the implications of your name being on the title but not on the mortgage. Many attorneys will give a free initial consult.
ok, I've since done some more reading and feel i should clarify....
I'm not on the NOTE. I don't think I'm on the mortgage either. I'm figuring out the difference between those terms and I'm not on any of it.
I am just on the title to the house..... so that would mean no on deducting interest, right?
You are correct. Basically, what it comes down to is that you and your grandmother "own" the house, but only your grandmother is on the hook to pay for it. Therefore she gets the deduction if there is one to take. For future planning purposes, you need to know how you own the house with your grandmother. Is it joint ownership with right of survivorship, tenants-in-common, or some other arrangement? It really does make a difference.
You are correct. Basically, what it comes down to is that you and your grandmother "own" the house, but only your grandmother is on the hook to pay for it. Therefore she gets the deduction if there is one to take. For future planning purposes, you need to know how you own the house with your grandmother. Is it joint ownership with right of survivorship, tenants-in-common, or some other arrangement? It really does make a difference.
This is not correct. The person or persons who's name is on the loan has nothing to do with the tax write off. The person who is listed on the deed of trust as the recognized owner, and therefore the one who gets the tax deduction.
You don't need a lawyer, you need a good tax man....
My wife and I are the sole persons listed on the loan, so we are responsible for the payments being made, but we are not on the deed of trust, so our daughter gets the write off. All you get for having your name on the loan docs are responsibilites, not write of...!!!
State laws vary. You need to know what happens if your grandmother should pass away. Hard to think about but you never know................
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