Originally Posted by Kmcc1205
#1;I recently "sold" my home, on the advice of a trusted realtor, to an investor in a trust situation. The mortgage is still in my name, but the deed was transferred to the investor corp. who has leased out the home and is making the monthly payments. My understanding is that they plan to hold onto to the property until the market turns around and then will "sell" it and then the mortgage will then be transferred to the final buyer at that time.Who can claim the deduction of the property taxes and the mortgage interest on tax returns.
You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract; the IRS also requires that you actually pay the interest. If your name is on the deed but someone else pays the interest, you can also deduct the interest. So, to claim mort int exp., You have to be legally responsible for the money and your name should be on the mortgage. Generally, you can only deduct real estate taxes if you are legally responsible to pay the tax , and you actually make the payments.
Taxpayers who don’t have legal title to a residence may be able to claim a deduction for the real estate taxes on the property if they are considered “equitable and beneficial owners.”that you actually paid while you were an owner of the property. If your name is on the mortgage, you would be considered to have a secured debt. But Federal Regulations indicates that interest you pay on a mortgage on real estate of which you are a legal or equitable owner can be deducted even though you are not directly liable on the bond or note secured by the mortgage.
You, as a Taxpayer, paying mortgage interest should fill out Sch A to see if your itemized deductions exceed their standard deduction, so UNLESS you itemize dedcutions, you can’t deduct your mort int exp;You can only deduct the interest on the first $1 million of your mortgage, unless your filing status is married filing separately, in which case the limit drops to the interest on the first $500K.