Posted by John Katitus on January 15, 1999 at 24:22:54:
My understanding was that only the person that made the interest payments to the mortgagee could deduct the interest. But that brings up the question of how to handle a wraparound mortgage. It would make sense that both could take deductions in that scenario. Thanks.
Tax credit - Posted by Alexander in Atlanta
Posted by Alexander in Atlanta on January 14, 1999 at 14:13:31:
Still reading a course I ordered but I have one question that does not seem to be answered. When you take over an exisiting non assumable mortgage who will get the tax credit for the payments. The mortgage company will still send that information to the homeowner. Did I miss something in my studies???
Re: Tax credit - Posted by Dave T
Posted by Dave T on January 14, 1999 at 22:34:48:
I assume that you are referring to a land contract sale. I also assume that you really are asking about the mortgage interest deduction rather than a tax credit.
You get the tax deduction for the interest payments you made to your seller.
Your seller gets the deduction for the interest payments made to his lender. The seller must also report as income the interest payments you made to him.
Re: Tax credit - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on January 14, 1999 at 14:29:29:
When I took over payments on some properties, I called the lender customer service and had them change the address on the loan to my address. This way, all notices come to me. Most often, they will not change the name for the account, but the address change is done without questions. Since you are making the payments, and you have documented proof of the payments (cancelled checks), you claim the tax deduction as an expense of the rental. This expense will be used to offset your income (rent) from the property on your tax return.