Dave Dodson wrote:
> On Apr 20, 6:03 pm, beliav...@[EMAIL PROTECTED]
wrote:
>> If someone wants to lend money to a family member to buy a house
>> (parent to child, for example), and he charges a prevailing market
>> interest rate, say 5.5%, what paperwork would be necessary so that the
>> borrower could deduct the mortgage interest on his tax return? The
>> lender would have to pay tax on the interest received.
>
> See IRS Publication No. 936[...]
As the pub states, the debt has to be secured by the home, so consult a
lawyer to ensure the loan contract meets the requirements.
Once you meet the qualifications for deductibility, re****ting it is a
cinch:
"Deduct home mortgage interest that was not re****ted to you on Form 1098
on Schedule A (Form 1040), line 11. If you paid home mortgage interest
to the person from whom you bought your home, show that person's name,
address, and taxpayer identification number (TIN) on the dotted lines
next to line 11."
Even if the person isn't from whom you bought your home, showing the
name and so on can't hurt.
-Mark Bole
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