What are the tax implications of someone buying a house for someone else?
December 10, 2012 7:21 AM Subscribe
YANMREA - You are not my real estate agent (nor my tax attorney) - but maybe you have some experience and insight on implications of one person buying someone else a house to live in.
posted by juniperesque to Home & Garden (6 answers total)
My mother, who lives in another state from me and my husband, has offered to put in some money to help us buy a home. The catch is, she wants her name on the deed so she can deduct the interest on her taxes. I see several complications to this, but I have no idea what the impact is. Do you know anything about:
- Does she get to deduct the full interest payments on her taxes if she does not live there? Partial deductions?
- What if she lives there 51% of the time?
- What if we pay the mortgage payments entirely, does that effect who gets the deduction for the interest payments? (e.g. If her name is on the deed, she paid the down payment, but we pay the mortgage payments which include the interest.)
- Do people ever split mortage payments, where one party pays the principal portion and another pays the interest and taxes?
If it helps, we both get along with my mother very well and are close despite living in different states. We trust her with money, she is smart and competent generally, and we are not concerned with any quid-pro-quo expectations as a result of her generosity.