Redeemable ground rent - Where do i enter this in TurboTax. IRS Publication says it is considered mortgage interest. I do not have a Form 1098

[email4bonnieh]

The land we have our manufactured home is leased and is a 30 year lease.  I understand that I am able to utilize the Redeemable ground rents based on the IRS Publication. I do not see where I can enter this data in Turbo Tax.  IRS Publication states it is considered mortgage interest, however I do not have a Form 1098 from the land lease payments.

[ToddL]

You don't have to have a Form 1098 to report mortgage interest (or equivalent).

In the "Tell us more about your loan from XXXX" interview screen, select "I did not receive a Form 1098"

From IRS Publication 17:

Redeemable ground rents. If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest.

[pattymac21629]

How - I don't have the answers turbotax requires

[bhansel61]

I still have not figured this out. I pay redeemable ground rent, the turbotax question screen does not mimic the situation.  I do not have a 1098, when I enter that it then asks me the outstanding loan amount, there is no outstanding loan amount.  It also asks if the loan is secured by a property of mine?  

[DaveF1006]

If you are paying rent, this is not deductible. It has to be something you own and have a deed for,

[bhansel61]

Hello, Redeemable ground rents are indeed deductible. The issue is that the TurboTax software does not allow for this type of scenario... at least that I can figure out so far.

Publication 530 - IRS.gov (click on link for more information): 

Redeemable ground rents. If you make annual or periodic rental payments on a redeemable ground rent, you can deduct the payments as mortgage interest. The ground rent is a redeemable ground rent only if all of the following are true.Ground rent. In some states (such as Maryland), you may buy your home subject to a ground rent. A ground rent is an obligation you assume to pay a fixed amount per year on the property. Under this arrangement, you are leasing (rather than buying) the land on which your home is located.

• Your lease, including renewal periods, is for more than 15 years.
• You can freely assign the lease.
• You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specified amount.
• The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled.

[IsabellaG]

I would consider entering the amount that you would need to pay to end the lease as "Outstanding Mortgage Principal" and the date that you started paying the ground rent as the "Mortgage origination date." Your situation is not common, but if this is truly redeemable ground rent then you are entitled to deduct the payments as mortgage interest. As long as the amount needed to end the lease will not trigger the mortgage interest limitations (For mortgages over $1,000,000 up to 12/15/ 2017 and $750,000 after 12/15/2017) you should be able to use TurboTax to claim this deduction.

[Ashpat23]

Can you please confirm this is the case. I have Redeemable ground rent but have never been able to enter it correctly into the Turbo Tax software correctly for it to be classified as a deductible expense. However, I need to ensure that my 2022 taxes allow for this correctly as my income has changed and I need this deduction. 

 

[Mike9241]

if it meets the criteria for being redeemable ground rent you deduct it as mortgage interest.  if you have issues when doing your 2022 post back with details.