Mortgage Interest

[S T]

If taxpayer wants to assist or help daughter buy a (let's say) Condo, and the taxpayer wants to participate in say 50% of the mortgage interest and property tax deduction - then the Condo should be purchased in both Daughter's and Mother's Name(or revocable trust for Mother) and both should be on the Loan secured by the property --- Correct?

Daughter would deduct one-half of mortgage interest and property tax as personal residence, and Mother would deduct one-half mortgage interest and property tax as a 2nd Residence - on Schedule A.

Next question that was asked in this scenario is what if it was a personal loan - not a bank loan - the loan would still have to be recorded and secured by the property correct for mortgage interest deduction?

Sorry, I am still "brain dead" from the tax filing last week. Thanks for your input

Sandy

[FEDUKE404]

I think you are basically correct on the need for title specifics and names on loan.

Without performing other research, I'm not quite sure that you can automatically assign half of everything to mom and daughter.

There may have to be some allocations, especially re mortgage interest, based upon who paid what when. (The daughter would likely need to make some showing that SHE really paid her half of property taxes and mortgage interest.)

And then things might, in the future, become a bit sticky should mom decide she wants to purchase/maintain her own "second residence."

FE

[S T]

Presumption

Thanks FE
Used the 50% as that is what the Mother addressed the issue to - (each splitting equally the mortgage payment and the property taxes) And yes, I would ask for substantiation.

And yes, one of the thoughts crossed my mind that if Mother joins in on this property it would preclude her taking a deduction for any other 2nd residence.

Planning stages or questions right now, so was trying to gather thoughts.

Sandy

[erchess]

Just a thought

If mom goes into this arrangement and later wants to buy her own second home, I think all she would have to do is claim for tax purposes only the most advantageous two. If it were deemed desirable not to waste half of the interest and taxes on the house in question then she could give the money to her daughter and let the daughter pay the full bill. Of course Gift Tax might have to be filed in that case.