Posted on: 19th Jun, 2011 10:03 pm
who claims the interest at tax time?
You may be able to claim the interest at the time of taxes.
If I am purchasing a home from my mother-in law and she is going to finance or rather hold the mortgage, what do I need to do to claim the interest on my taxes? A QCD has been done to take her name off of the property. Do I need a broker or realestate attourney to purchase this home?
You can have a deed of trust drawn up and recorded from your mother, then you would have the interest payments given to the IRS via 1099 from your mother to you. Then the IRS will know you paid interest, and you can claim the deduction. If the IRS is not aware, then you would not be able to claim the deduction. There are several 1099 forms, I have not certain which one applies, but consult a attorney or title company to help you prepare.
I'll suggest you speak with a tax advisor as well - strictly for the tax ramifications for each of you. As Chris noted, an attorney is a good person to call upon for clarification of all the legal documentation you'd need.
