I need help to understand what is the best way to treat this property I am buying for my dad. Due to my dad's credit, I am buying/financing a townhome for him (Mortgage in my name only) but he will live in it, pay the 20% downpayment, and pay the mortgage from his account. My questions are:
1. Can he claim the mortgage interest at the end of the year?
2. Do I need to report anything on my taxes? If so, how do I report it? Second home or rental?
3. As an FYI, I can not add him on the deed because he has a current judgement/lien against him in the courts from bad credit almost 10yrs ago and I don't want to take the chance of losing the home. What are my options?
I've been told that as long as a person as a "vested" interest in the property, ie..they pay for the mortgage, live in it,...etc, they can claim the mortgage interest regardless of who is on the 1098. But how do I treat this scenario on my own tax return?
