Tax question help

[XKK]

My mother and I co-own a rental home, but she took out a home equity loan under her and my dad's name. I am the only one making the loan payments and collecting the rent. Would this be subject to gift tax?

[RobertB4444 · Accepted solution]

No.  Since the home equity loan is in your mother's name then the interest from that loan would be entered on her return.  Since you are making the mortgage payments then the interest from the mortgage can either be entered as a rental expense on your return or split evenly between your and your mother's tax returns.  None of the items that you have listed would be seen as gifts or have to be treated as such.

@XKK 

[XKK]

Thank you for your helpful answer.! Following up on the question: If I finish paying off the mortgage that is in my mom's name and she transfers the house to me, will that trigger any gift tax? Initially, she took out the mortgage because I didn’t have enough income or assets to qualify for one myself.

[AmyC]

If she gives you the house, she will be responsible for any gift tax or return needed. See: 

• The Gift Tax Made Simple - TurboTax Tax Tips & Videos
•  Gift tax | Internal Revenue Service