Posted by JHyre in Ohio on August 01, 2003 at 20:16:34:
The most probable tax treatment: The home is considered yours and you get the interest deductions. Your in-laws would not be considered the owners for tax purposes and suffer no tax detriment. I say “most likely” because the details of your arrangement would presumably be structured to arrive at that result.
John Hyre
Tax Question with Contract for deed - Posted by Michelle
Posted by Michelle on August 01, 2003 at 08:10:33:
My husband and I are trying to refinance our home but found out that because of a bankruptcy a year ago that in order to get a better rate we’d have to wait at least another year. My husband’s sister and her spouse have offered to help us out by taking out the mortgage in their name for our home and we would file a contract for deed. We will be refinancing the home again in two years back into our name. My in-laws own their own home and have paid off their mortgage.
Since our home would still be legally ours in deed and we will be making the payments will we still get the tax benefit in writing off the interest?
Also, since our home would technically be considered investment property for my in-laws will they get penalized at tax time or is there some tax benefit for them?
–Thank you.