My husband and I are on a lease to own for our home. Can we list this as paying rent? How do we report the taxes and small down payment paid?

[esdhb96]

We have not entered into a mortgage with anyone. We are unsure if we need to get an info from the home owner or the program we went through. A small down payment was made before moving in. We have paid towards back and current taxes as well as the back water bill. What do we include on the taxes?

[PatriciaV · Accepted solution]

Yes, you may consider the amount you pay each month as rent, after deducting any portion that is considered an escrow for your future purchase. The escrow is not a deductible amount, nor is the small down-payment you made.

Since title to the property has not changed hands, you don't own the property and should not deduct the property taxes you paid. Instead, that amount would be added to your basis in the property when and if you finally close on the sale.