1. There is a big difference between mortgage interest from a mortgage company and a seller financed mortgage.
- If the father-in-law owns the house free and clear, then he is seller financing to your son and his daughter, then his name and social go on the tax forms.
- They "went and refinanced the house", makes it sound like a mortgage company mostly owns the house - not the father-in-law. In this case, the father-in-law is not entered on the return, the 1098 from the mortgage company is entered.
- If they are paying the father-in-law and the mortgage company interest, then both are entered.
2. If your son and his wife did not have a previous loan for the house, this is not a refinance for them. If the father- in- law is involved, it was a refinance for him. The refinance question is to determine if points paid are deductible up front or must be spread over the life of the mortgage.
3. Yes, it all went to buy or build then select yes.
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