My wife and I and our adult daughter together bought a house this year. Our daughter lives there. The ownership is joint tenancy for the three of us. All three of us are also co-borrowers on the mortgage. We - the parents - actually make the mortgage payments; our daughter pays us a monthly amount in an informal "rent-to-own" arrangement.
We are also spending $ this year to make substantial improvements to the home, including energy efficiency upgrades that will be eligible for tax credits.
My wife and I file jointly, with AGI ~$80K. Our daughter is single, files an individual return, with AGI ~$40K. In recent years, it has been advantageous to take the standard deduction on both returns, but that might be different with this purchase. How would you advise handling the house purchase, mortgage interest and energy upgrade costs on our tax returns (parents' and daughter's)?
Thank you in advance!
