- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
"my old man"? -- your father? spouse?
"my partner and I live in a trailer" -- you don't live in the home?
To deduct mortgage interest, you must be legally obligated to pay the mortgage (a borrower) and you must actually pay the interest. You don't have to be an owner.
To deduct property taxes, you must be legally obligated to pay the taxes (be a legal owner against whom taxes are assessed) and be the person who actually pays the taxes.
1. Yes. [edited to add: see my updated answer below]
2. If you give the owner money, and the owner pays the property taxes, the owner can take the deduction (but because the standard deduction is so high, the owner probably would not actually save anything on taxes, especially if their income is so low that they need help with the mortgage and taxes). If you pay the taxes directly, it would be risky for the owner to try and deduct them as a gift. You can't deduct the taxes that you pay if you aren't legally obligated to pay them.
3. The only IRS "first time homeowner" tax benefit is the ability to withdraw up to $10,000 from an IRA to buy a home without paying the 10% penalty for early withdrawal (you still pay regular income tax). In this case, "first time" means you did not own the home where you lived as your main home at any time in the 2 years prior to the purchase you are using the IRA for. You can own another home and still qualify, just not the home you live in. I can't offer any thoughts on state or local "first time home buyer" programs.
There can be tax consequences to being placed on the deed of someone else's home. There are different forms of deed, and different situations where the calculation might be different (for example, if the owner is elderly and you expect to inherit the home but not live there, you might do something different than if you were going to move in with someone and share expenses.) Proper legal and tax advice would be strongly recommended.