We can't tell based on your information. With a typical home sale, the deed is transferred to the homeowner, and the mortgage lender retains a lien on the home -- the lender does not own the home, but they have a legal right to seize the home if the homeowner stops paying on the mortgage. The deed and mortgage generally must be recorded at the county clerk's office.
Turbotax asks if you are a homeowner so that later, it will ask you about deducting mortgage interest payments and property taxes. You can only deduct property taxes if you legally own the home and you actually pay the tax. You can deduct mortgage interest if you are a legal or beneficial owner of the home, and you actually pay mortgage interest.
If you live in the home and you are promised to own it if you meet certain conditions, then you are at least a beneficial owner. But to really answer the question, we have to know if you are also a legal owner, and if the payments you are talking about are mortgage payments and property taxes to a bank that holds a mortgage, or some other kind of payment to some other kind of entity.
Do you have an ownership interest in the property? Is your name on the deed? Will it be on the deed upon fully satisfying the 22 years of payments? Is this some kind of cooperative housing arrangement?
IRS Publication 936 Home Mortgage Interest Deduction states:
You can deduct home mortgage interest if all the following conditions are met.
- You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040 or 1040-SR).
- The mortgage is a secured debt on a qualified home in which you have an ownership interest.
Secured Debt and Qualified Home are defined here..
You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:
Makes your ownership in a qualified home security for payment of the debt;
Provides, in case of default, that your home could satisfy the debt; and
Is recorded or is otherwise perfected under any state or local law that applies.
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
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