The reason for this arrangement was to assist the resident-owner in the purchase of the property due to credit and income limitations
So the above statement conforms beyond any doubt what-so-ever that there never was, is not now and never will be an "intent to make a profit."
My question is: does this count as a rental property for me as I pay the mortgage, taxes, and insurance? The resident-owner pays me monthly in cash. In any other circumstance, I believe it would classify as a rental property but I am not sure here as the person living in it is a joint owner.
This is not a rental property by any stretch of the imagination. Everything you pay concerning this property is a SCH A deduction. Two criteria *must* be met (and you have to prove it if audited) in order for you to claim mortgage insurance and property taxes.
- You must be legally obligated to pay it. (you are since your name is on the deed and the mortgage, and you can prove that if needed)
- You must *actually* have paid it. You should be able to prove this with cancelled checks or bank records showing the transfer of money from your account, to the lender.
as the other two joint owners don't benefit from itemizing and will take the standard deduction.
Doesn't matter if they benefit or not. If *YOU* did not pay the mortgage interest and property taxes, then you can't claim it. If you paid part of it, you can only claim that part you actually paid.
The resident-owner pays me monthly in cash.
Then the resident owner is "giving" you a gift. Doesn't change the fact that you still have a legal obligation here. So long as the total amount they give you does not exceed $15,000 in any one tax year, nothing has to be reported.
If the amount you are given exceeds $15K in any one tax year, then the giver (not the recipient) of the gift is required by law to file IRS Form 709-Gift Tax Return. The recipient of the gift doesn't have to report jack squat to anybody.
Understand that if the giver does have to file the form 709, they will ***NOT*** pay any taxes to any taxing authority on the money they gave you. It's just a reporting requirement established by federal law that the giver (not the recipient) has to adhere to.
