My father tried to purchase a house with me and my husband but we didn't qualify for the loan. He bought the house anyway and wants us to make all the payments. He says we can deduct the interest because we are going to be paying the bill.
If i make payments on another persons home loan can i claim a tax credit?
No.
Reply:The only way you can deduct the interest is if you are liable for the payment. From what you described you are NOT. However, if your father agreed to sell you the house and you had a legitimate note to him then the interest would be deductible to you ... income to him ... then offset by his deduction - or a wash of sorts. Seek legal help when making this transaction if you go that route. Otherwise, you are out of luck with the deduction.
Reply:Has to be your primary residence. But the people you are making the payments for can claim it. See if you can work something out with them.
But they can claim it either way without any deal with you.
Reply:1. You need to learn the difference between a "tax credit" and a "deduction". They are not the same thing. There is no tax credit for mortgage interest on a residential home loan. There is a deduction.
2. You definitely do not get a credit. You might get a deduction, but probably not, because probably only the person who owes the money who can get the tax benefit.
3. You are paying the interest and he will own the house after you have paid for the mortgage. Is this really a good deal?
Reply:That is a question for a tax professional. You certainly wouldn't want to have an issue with the IRS over this. So you had better check.
Reply:If you are on the deed then yes, otherwise no. Just have him sign the grant deed to you and leave the mortgage in his name, you will then get the tax deduction. For those that will say this can trigger a due on sale clause and the lender can call the note due, that's not true. You can transfer property to a child without triggering the DOS clause.
ginkgo
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