Home loan from parents

amylaureljones — Sat, 01 Jun 2019 05:00:18 GMT

We bought our house from my husbands parents and we pay them, rather than going through a bank. How do I file this for taxes?

If the loan meets the requirements of a secured debt (exp...

MargaretL — Sat, 01 Jun 2019 05:00:19 GMT

If the loan meets the requirements of a secured debt (explained below) - please report the interest as a regular mortgage interest paid:

Federal Taxes
Deductions and Credits
Your Home,
Select Mortgage Interest and Refinancing - enter the name of your lender and indicate (on the next screen) I did not receive a 1098, then enter the amount.

If the loan doesn't meet the requirements - it is considered a personal loan and is not tax deducible.

Home mortgage interest is deductible only if the mortgage is secured debt. Secured debt is represented by a signed instrument (such as a mortgage, a deed of trust or land contract) that:

Makes the borrower’s ownership in a qualified home security for payment of the debt,
Provides, in case of default, that the home could satisfy the debt, and
Is recorded or is otherwise perfected under any applicable state or local law.

Please refer to the IRS Publication 936 for more details.

topic Home loan from parents in After you file

Home loan from parents

If the loan meets the requirements of a secured debt (exp...