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Karin8
New Member

WE are living in a house owned by our son, but we are paying the mortgage including property tax and interest payments. Can we claim those as deductions?

 
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3 Replies

WE are living in a house owned by our son, but we are paying the mortgage including property tax and interest payments. Can we claim those as deductions?

Probably not. 

Normally you have to be the homeowner to deduct property taxes and mortgage interest.  There is a doctrine called constructive ownership that the tax court has used to sometimes recognize that a non-owner has the privileges and duties of ownership, but it can be a difficult argument to make.  The case I remember best involved an immigrant whose brother bought him a house because the immigrant did not have a credit history.  But the immigrant made all the payments, lived in the home with his family, made repairs and took on all the other obligations of ownership, and it was always the family's intention to transfer the home to the immigrant brother when he could qualify.  The IRS denied the deduction but the tax court ruled in favor of the family saying that he had a constructive ownership interest.  Another case involved a son who moved in to the home of his elderly invalid father, and took over the payments and care for his father with the expectation that he would inherit the home when his father died.

So the question comes down to your circumstances.  If this is somehow "your house", but your son owns it temporarily for some reason, and you act in every way like a homeowner, you could try and make the argument.  If you are living there as an informal family rental and paying the expenses instead of rent, but it's acknowledged and intended that this is your son's house, then the argument probably won't succeed that you have an ownership interest.

If you are not owners and do deduct the expenses, the IRS might not audit you.  But if they do, this is the kind of argument you will need to make to them.

Realstate
Returning Member

WE are living in a house owned by our son, but we are paying the mortgage including property tax and interest payments. Can we claim those as deductions?

Hello,

I took out a rental property loan to buy a house for my brother to live in. He is currently taking care of all the expenses and paying the mortgage directly. How do I file the house in schedule E, if I am not actually getting any rental income? 

Thank you

GiseleD
Expert Alumni

WE are living in a house owned by our son, but we are paying the mortgage including property tax and interest payments. Can we claim those as deductions?

Based on your description of this arrangement, you are not acting as a landlord. You just took out a loan that your brother is paying on, and you mentioned that he handles all the expenses. You have no income or expenses attributable to this arrangement. There is nothing to report on Schedule E. 

 

@Realstate

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