spamtrap[at]sbcglobal.net (Stuart A. Bronstein) writes:
- quote -

More generally, I would be interested in any similar
two-prong requirements. Another example that is often used
is real estate tax. A more subtle one is improvements that
increase the basis of your home. If there is a two-prong
test I would like to know what records are required to
sustain the deduction or basis.

Dan Lanciani
ddl[at]danlan.*com

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ddl[at]danlan.*com (Dan Lanciani) wrote:
- quote -

As I said earlier, the statute only requires that the debt
be secured by real estate owned by the taxpayer.

Can anyone come up with any authority for other
requirements?

Stu

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rigotti[at]wideopenwest.com (Mark Rigotti) writes:

- quote -

For deductions like this that have a two-prong test, what
records are required to sustain the deduction on audit?

Dan Lanciani
ddl[at]danlan.*com

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Gene E. Utterback, EA wrote:
- quote -

Try Saffet & Ana Uslu v. Comm'r, TC Memo 1997-551.

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"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

That's the legal title, yes. But presumably the daughter
and her husband made the down payment, all mortgage, tax and
other payments. It's theirs in all but name, which is the
definition of a trust.

But as you say they may still be tripped up because their
name is not on the loan.

Still the code (§163(h)) doesn't require the taxpayer to be
the named borrower on the loan, just that the loan be
secured by the residence. If regulations say the tp's name
must be on the loan, it can be argued that they exceed the
scope of the statute and are unenforceable to that extent.

Stu

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"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

Not necessarily - I've posted this before, but at the moment
I can't find the cite. There is case law to support the
deduction of mortgage interest in situations where the
equitable owner of the property is not the borrower of
record with the bank. The situation was narrowly construed,
but if the circumstances are right it is possible for the OP
to deduct the interest even though his name is not on the
mortgage with the bank nor on the deed to the property.

For my normal research fee <G> I'll stop billable work and
redo the research.

Gene E. Utterback, EA, RFC

Moderator: Your recollection and mine converge.

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:

- quote -

Did I miss something in the OP, or are you making an
assumption? My assumption was that the mother owns the
property fee simple.

--
Phil Marti
Clarksburg, MD

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- quote -

I see a possible gift to the Mother here (of the house), but
how do you get a grantor trust out of this?

-HW "Skip" Weldon
Columbia, SC

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<jwilder987[at]yahoo.com> wrote:

- quote -

Sorry to say it but it sounds to me as if noone is legally
entitled to the deduction. To be entitled to the deduction
you must both be legally obligated on the underlying debt
(ma is you are not) and actually pay the debt (You are and
ma is not)

Some might advance the argument that there is a trust
agreement somehow. My bet is that the mortgage holder is
not aware of this and probably would invoke the due on sale
or transfer clause normally in mortgages. Therefore I
personally do not by the trust agreement argument.

Rgs,

Mark

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<jwilder987[at]yahoo.com> wrote:

- quote -

And nobody gets a mortgage interest deduction, since one must
both owe and pay the interest to deduct it. Refinance or
fuggedaboudit.

--
Phil Marti
Clarksburg, MD

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jwilder987[at]yahoo.com wrote:

- quote -

Legally the house is owned by your mother as trustee for a
grantor trust. As it is a grantor trust you are actual owner
of the property and are actually paying the loan. Seems to me
that you'd have a good argument that you should get the mortgage
interest deduction on that basis. Lots of people have their
homes in grantor trusts.

I suppose you could get a tax id number for the informal trust,
though technically it's not required. I don't know the best
way to deal with it on that end.

Stu

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Hello I recently 'bought' a house and my husband and I live
in it. Due to our low credit, we had to put the house in my
mother's name. She got the loan. We pay the loan payments
directly to the mortgage bank.

I know that mortgage interest is tax deductable but the
problem is everything is in my mother's name and at the end
of the year, the $ amount of interest paid will be reported
as in my mother's name, with her SS# by the mortgage bank.

Is there any way of us deducting this interest since we are
actually paying it and not my mother?

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