the home is my family's permanent residence since 2013 & I was on original deed at time of purchase as 50% owner - I was removed from title and mortgage so my mother could refinance and cash out some equity in 2017.
in 2019 my mother suffered a medical emergency, cannot manage her own affairs, and I had to take over to help. after petitioning in probate court, I was named her permanent legal guardian and conservator.
I am also her sole heir and manage all of her retirement income (SSI & Pension) as ordered by probate court to manage her estate (living expenses & debt payments) and to provide her lifetime of care.
I applied for a mortgage loan modification due to financial hardship and was approved by lender. now 6 months later the original loan has been closed and modified from a 30yr fixed to a 40yr fixed with lower payment.
currently, my mother is the owner on title and sole borrower on note, but resides in an assisted living facility, not at the family home. her long term care insurance currently covers her room & board, but this is not a permanent solution since claim funds will run out.
the loan is still under my mother's name, however, she was not allowed to sign based on rules of conservatorship, so the lender accepted my signature on her behalf as conservator. I am not on title, but working on getting court order for "power to amend title" so we can refinance and build an ADU to become her future residence. I am responsible for making all payments on her behalf, I live in home with my husband and kids, we file jointly as married couple.
if I pay 50% of all mortgage payments (includes taxes, principal & interest), can I deduct 50% of the expenses shown on 1098 issued to my mother by lender?
or do we need to first get the court order for "power to amend title" and refinance the mortgage so I am on title and note before qualifying for deduction?
thank you in advance for any definitive answers or qualified opinions here.
You must have an ownership interest in the home to deduct intereston a home loan. This means that your name has to be on the deed or you have a written agreement with the deed holder that establishes you have an ownership interest.
thanks, @Bsch4477 - since the conservatorship revokes her right to make such a written agreement in current situation (even though she does want to grant ownership) - we will continue to go through the next steps of seeking "Power to Amend Title" from probate court first; they do not consider her opinion, but they will either review in probate court auditing process or else may force us to file an official petition through attorney, which gets pretty expensive fast - but we will not be on the defensive vs. IRS so likely best plan.
then apply for refinance with existing lender as they have indicated that would accept new application and are fully aware of our legal situation. I imagine, we could try to push it, claim the deduction, get audited and wind up in tax court for a ruling, but this is no longer an emergency since loan mod was completed