Thread: I need help!!

Tax and mortgage interest deductions have been instituted for property owners, not renters or tenants.

That's one of the HUGE incentives created by Uncle Sam to promote home ownership. And that's one of the main reasons many people purchase homes rather than rent their home.

So the short answer would be no... if you are renting an apartment, condo, or single family residence, you probably don't qualify for these tax benefits. It doesn't matter that the 'landlord' is your parents, or that you're 'covering' the tax and mortgage for the property owners. At the end of the year, those tax bills and mortgage interest statements don't come in your name, do they? And besides, you're now generating additional 'rental income' for your parents that they must report on their own tax return. Did you consider that aspect?

If the mortgage or taxes are not paid, who will be responsible? Who will the lender and/or the government pursue? Against whom will judgments be filed? You or your parents? You can't reap the benefits without taking the risks.

BTW, deductions for rental property and your personal residence are different. I trust your parents are getting sound tax advice from a professional.

P.S. - I think an alternative to this situation would be to have purchased the home in your name with your parents as co-signers on the note. I don't know if this would have even been possible based on your credit and income and other details. But that would have allowed you to take advantage of these tax breaks. And it probably would have simplified your parents' tax accounting as well.

Of course, I'm not a tax expert. Always consult a tax expert.
Good luck!

Thanks for the details, but you really didn't answer my question...

Should I be paying the interest and/or taxes if I am not getting the return on them?

Originally Posted by lanelle17

Does paying the taxes and interest give us the right to claim this on our taxes? I'm not sure if I find it fair for us to pay them and my parents get the detuction...

I guess I misunderstood the above question. I thought you asked if you could claim the deductions on your taxes.

If your real question was 'should you be paying the taxes?'... then the answer is this: Your parents own the property and are, in effect, 'renting' to you. The terms of the rent might be a monthly payment, payment of the mortgage principal only, payment of the mortgage and taxes, payment by the week, by the month, annually, or, if agreed to by both parties, payment that is far less than the mortgage or taxes. You may arrange with your parents to make out your checks directly to the lender and the tax authority. Or you can make out your checks to your parents and allow them to pay THEIR mortgage and taxes directly. It really doesn't make any difference in the scheme of things because they are responsible for the mortgage and taxes. And as the property owner and mortgagor, they receive the tax benefits. Not their tenants.

If I were in this situation I'd arrange to pay my parents directly and let them take care of paying the mortgage company and taxes until ownership is transferred to you.

By the way, you mentioned rebuilding your credit... what steps are you taking to make that happen? That to me seems to be the biggest concern here. Far more important than tax deductions on a property you couldn't buy because of poor credit in the first place.

Best of luck.

"By the way, you mentioned rebuilding your credit... what steps are you taking to make that happen? That to me seems to be the biggest concern here. Far more important than tax deductions on a property you couldn't buy because of poor credit in the first place."


WOW... that was pretty rude. You don't even know me. I don't think I asked you about my credit and I don't think it should be any of you concern to advise me on anything other than your "real estate expertise".

Good luck in Texas. Thank god you don't reside in Cali, they would eat you alive!!

Originally Posted by lanelle17

WOW... that was pretty rude. You don't even know me. I don't think I asked you about my credit and I don't think it should be any of you concern to advise me on anything other than your "real estate expertise".

Good luck in Texas. Thank god you don't reside in Cali, they would eat you alive!!

You came to a real estate forum asking for advice. In fact you specifically said this in your first post:

Originally Posted by lanelle

Our plan is that when mine and my husbands credit is cleaned up, we will put the hoome into our names.

a. You have bad credit and cannot get a mortgage in your name.
b. Your parents were kind enough to have bought you a home on their credit.
c. You feel your parents are being unfair by taking the deductions they are due for their home.
d. You came to a forum asking for professional advice.
e. You've been given professional advice.
f. I've been to California. Beautiful state. Some of the folks out there are very nice.

Best of luck.

[quote=Texas_

is this your first post on real estate forum?

FAIR has nothing to do with anything. Do you have a lease? The lease spells out your obligations. As for your taxes; call your city tax assessors office and find out for yourself, they might even be on the city's web site.

Originally Posted by lanelle17

Hi... I have a general question.

My parents bought a house and we pay the mortgage. For now, we are "renters" to the mortgage company. Our plan is that when mine and my husbands credit is cleaned up, we will put the hoome into our names. Until then we will be "renting" and my parents want us to pay the taxes and interest at the end of the year. Does paying the taxes and interest give us the right to claim this on our taxes? I'm not sure if I find it fair for us to pay them and my parents get the detuction... Also, we live in CA. Does anyone know what the taxes would be on a home that was purchased for $242k and assessed for $480k?

Please help me...
thanks

If you eventually want to put the home into your names you might want to consult a professional in CA about the best steps to take so you are prepared. If you were in NV I would advise you to make the payments directly to the lender (you can have the taxes and insurance included through an impound account), as well as have your parents add you to the title. Then when your credit is restored (how ever you choose to restore it) you will be able to show proof that you have been making the payments for "X" amount of months and you have been on title for "X" amount of months. With that history a lender would be more prone to granting you financing.

As far as the taxes, normally you as a tenant would not pay the taxes and would not have the tax benefits you gain from ownership. If you and your parents have some other arrangement that is up to you and them.

I hope this helps.