i sent this earlier = items missing :Bank put $96,000 interest on 1098 SON=INVESTOR

[sujansingh1942]

1 ) the house was in the name of Parents & son ( all three were on the Deed when house was bought 12 + years ago ) The Note was in the name of Parents.
2 ) the house went in Foreclosure in Aug 2009
3 ) rather then going thought Foreclosure the TAXPAYER Paid off the House $400,000 plus
4 ) the Bank has issued 2014 1098 in the amount of { due since 2009 } interest $96,000
5 ) the Bank didn't put in 1098 Property Tax which was paid by the Bank FROM 2009 through 2013 $35,000 ( in last 5 years, however Taxpayer paid in 2014 all inclusive amount of Payoff was $400,000)

the Total of $400,000 "Pay Off " in 2014 Included Interest, Delinquency fees, Property TAX, & Other Foreclosure cost ( attorney fees, Court Cost, property valuations, Some Bank bought Insurance.

outstanding fees etc $12,000 corporate Attorney fee, Court fees, ETC $6,000 outstanding fees , $35,000 Property Tax ) taxes were paid in last 5 years by the bank , But we taxpayer has JUST paid as part of the Pay OFF $400,000 = Amount ( all of these exps . )
THE son is the investor

[Roland Slugg]

Thank you for posting all that interesting information.

[dtlee]

Not following completely....

Was the property tax paid by the bank from 2009 to 2013 or did they add that to the taxpayer's outstanding debt from 2009 to 2013? If the real estate taxes were added to their outstanding debts during the prior years, wouldn't the taxpayers be considered to have paid those taxes with additional third party debt when the taxes were paid (i.e., in 2009, 2010, 2011, 2012, and 2013)? Yes, they paid off the debt when the property debt was paid off, but are you saying that this would give them the deduction in the current year instead of when they became liable for the additional debt associated with those payments?

[sujansingh1942]

Was the property tax paid by the bank from 2009 to 2013 or did they add that to the taxpayer's outstanding debt from 2009 to 2013? If the real estate taxes were added to their outstanding debts during the prior years, wouldn't the taxpayers be considered to have paid those taxes with additional third party debt when the taxes were paid (i.e., in 2009, 2010, 2011, 2012, and 2013)? Yes, they paid off the debt when the property debt was paid off, but are you saying that this would give them the deduction in the current year instead of when they became liable for the additional debt associated with those payments?

Topic Review (Newest First)


we believe since we taxpayer paid the property tax in 2014 & should be deducted in 2014 tax year 1040 ( Sch A ) taxpayer paid = from 2009 through 2013 : all app $35,000 plus in 2014 ( part of $430,000 pay off amount to the bank)

yes Bank paid every year from 2009 through 2013 ) also I didn't get the answer to other cost Court , attorney cost App $12,000 & another Late fee & property appraisal every now & then fees etc APP $6,000 PLUS . and how to allocated between invested SON & Parents ( $430, 000 ) was paid by all three of them ( father, Mom & invested SON ) any QS pls call = my Cell (786)346-3806 thx Jan 21, 2015 3.27 pm Miami, Fl

01-16-2015, 08:59 PM
dtlee


Not following completely....
Was the property tax paid by the bank from 2009 to 2013 or did they add that to the taxpayer's outstanding debt from 2009 to 2013? If the real estate taxes were added to their outstanding debts during the prior years, wouldn't the taxpayers be considered to have paid those taxes with additional third party debt when the taxes were paid (i.e., in 2009, 2010, 2011, 2012, and 2013)? Yes, they paid off the debt when the property debt was paid off, but are you saying that this would give them the deduction in the current year instead of when they became liable for the additional debt associated with those payments?

[sujansingh1942]

INterest on 1098 form $96,000 thaaaaanx = looking fwd to hearing from u ! good nite!

Thank you for posting all that interesting information.

I shall be looking fwd to receive ur reply to all those Qs= property tax=$35,000 , $12,000, $6,000 thaaaaanx !

[Koss]

Property Tax

If the bank paid the property tax each year and added those amounts to the principal of the loan, then this means that the property taxes were paid in the year that they were actually due. In other words, the borrower actually paid the property taxes, on time, with funds that were borrowed from the bank.

This is probably what happened. The terms of the mortgage allow the bank to advance additional amounts, if necessary, at their discretion.

When the borrower finally paid off all amounts due in 2014, they were not paying property taxes. They were paying off a loan from the bank. The property tax was paid to the county years ago. Those payments were made by the bank, but they were made with money that they bank lent the taxpayer. The bank was effectively acting as an escrow agent for the taxpayer. The bank was not obligated to pay the property tax.

They can't take a deduction for those taxes in 2014, because that's not when they were paid. They can amend previous years, going back to 2011.

BMK

[Koss]

Other expenses

Attorney's fees and court costs associated with a foreclosure are personal expenses that are not deductible.

In theory, I suppose they might be added to the basis of the property if the house was actually sold in a foreclosure, but that's not what happened here...

Was this a rental property??

BMK

[dtlee]

Good to see you, Mr. Koss....

As generally is the case, I agree with your assessment.

The taxes were paid using third-party debt in the years they were paid by the mortgage company and added to the loan.

In the same way that purchases made with a credit card allow those purchases to be deducted currently, or medical expenses paid over time via Care Credit (and similar third-party products) can be reported when the debt is incurred, or educational expenses paid with an education loan are eligible for tax benefits in the year paid via the loan, the taxes paid are deductible by the mortgagor when the debt is incurred rather than when the debt is paid.

[Gary2]

Tangent alert:

I believe Roland's post was because you didn't ask a question in the original post. dtlee had the patience and insight to identify the issues of concern, but I think you'll get better responses and even write better notes if you begin with explicit questions. Then write the details. That way, we know where things are going and what to look for when we read the details.

Also, try to pick one label per person (or player) and stick with it. I have no clue whether "TAXPAYER" means parents, son, all three collectively, client, or something else.

I'm not trying to pick on you, many people switch to pronouns that sometimes aren't clear, or otherwise change terms in the middle. As we get into the crazy season, it helps to be clear and, when it comes to identifying the parties involved, consistent.