beliavsky@[EMAIL PROTECTED]
writes:
> 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.
As mentioned by another poster, getting this stuff right,
particularly documentation such that taxes can be handled
right (ie. mortgage interest deductibility, paying taxes
on interest income) and so that recourse is set up right
(ie. forclosure in the event of default), etc - is far
from trivial.
A lawyer could probably do much of it, but you might
save yourself a lot of money going with a service which
does a lot of this. Most mortgages are not held by
the banks which issue them, nor are they serviced by
the folks whose money is actually lent - someone lends
the money, someone else sets up and issues the loan,
and someone else may then service it (collect payments
and forward them to the lender, send out statements
and tax documentation).
I haven't had any reason to use them, but Circle Lending,
which has now become Virgin Money - will take care of
most of that for you. (I have no idea if there are any
other similar relatively low-cost providers, but I'd
be surprised if there weren't).
Anyway, take a look at <http://www.virginmoneyus.com>
If you do use them, please let us on the newsgroup
know how it goes.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators
strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM
THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
the
Newsgroup.
|
