Used mobile home

[mikiem12]

I made a personal to buy a mobile home for my son and his family so they would have somewhere to live.  It was in a mobile home park.  Can I deduct the interest on the loan and the ground rent that has to paid where the mobile home sits.  

[pk]

@mikiem12  -- there are two options here depending on exact facts and circumstances --- (a) you can  recognize the place as a second home, personal use  and deduct as such; or (b) your son/daughter-in-law  can use this  as  " constructive owner/equitable owner " and deduct the  eligible expenses  as a home owner -- if and only if they are actually paying those expenses.  

Does that help ?

[Mike9241]

the ground rent may not be deductible under either option. the mobile home must have sleeping, cooking, and toilet facilities to qualify as a home for deducting interest. 

land rent - periodic lease payments made for the use of land on which a home is located can be deductible as mortgage interest. to be deductible all of these conditions must be met;

1) the land lease term is more than 15 years including renewal periods included in the lease.

2) the lease must be freely assignable by the lessee

3) the lessee has the right to terminate the lease and purchase the lessor's land by paying a specified amount

4) the lessor's interest in the land is a security interest to protect the entitlement to rental payments.

[rjs]

The interest on the loan is probably not deductible under any circumstances. You said it's a personal loan. For the interest to be deductible as mortgage interest, the loan has to be secured by the home and must be recorded by the appropriate local or state authority.

[Opus 17]

You can deduct mortgage interest on your main home (where you live most of the time) and one second home. Your second home for the mortgage interest deduction can be a home occupied by family.   However, a mortgage must be secured by the property with a lien or mortgage, so a personal loan is not eligible. 

Ground rent is not deductible. 

[pk]

@mikiem12 , generally agreeing with the additions/clarifications by @rjs , @Opus 17 , @Mike9241   -- but note that we are assuming a few things here and therefore  trying hard to cover the full situation  -- to focus this further, perhaps some clarifications  from you would be useful.

Also there is no reference to the state that this  property is in  nor which state you live in.  I say  this because  I know for MI at least, a portion of the ground rent is tagged as property taxes levied for purposes of MI property tax credit  ( if one is eligible otherwise).

Hope all this helps you 

[Opus 17]

---

@pk wrote:

@mikiem12 , generally agreeing with the additions/clarifications by @rjs , @Opus 17 , @Mike9241   -- but note that we are assuming a few things here and therefore  trying hard to cover the full situation  -- to focus this further, perhaps some clarifications  from you would be useful.

Also there is no reference to the state that this  property is in  nor which state you live in.  I say  this because  I know for MI at least, a portion of the ground rent is tagged as property taxes levied for purposes of MI property tax credit  ( if one is eligible otherwise).

Hope all this helps you 

---

Yes, however, even though a portion of rent may be counted toward property taxes for purposes of a state credit (NY also does this), those monies are not actual property taxes for the property tax deduction. 

[Carl]

made a personal to buy a mobile home

That could be interpreted to mean you loaned the money to your son. But in the context presented it sounds to me like you took out a personal loan to buy the mobile home. Typically, a personal loan is not secured. In order for the interest to be deductible, the loan must be secured by the property it was used to purchase. If so, then that's not really a personal loan as much as it would be a mortgage. So if the loan is not secured by the property it was used to purchase, the interest is just not deductible.