A Warranty deed was filed when we purchased and we pay the property taxes. Seller is saying he has had a loss due to some legal issues with the property prior to us He doesn’t want any amended tax returns done and has said we can start claiming the interest as of 8-1-18. Can he legally do this?
No ... not legal. If he will not comply then you can simply put the deduction on your return with all his other info on a statement and attach it to the tax return and let the IRS work it out. If he needs to amend his return that is not your problem. Show him this from the IRS :
You must give the payer of interest income your correct taxpayer identification number; otherwise, you may be subject to a penalty and backup withholding.
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