Mortgage
I own the mortgage on my daughter’s home. How do I report her interest payments to me?
How can she deduct these from her income?
Terry Says
Whew, that depends on how you documented the loan! And for that, you should contact an attorney.
But you might run one option by the attorney (or accountant). Every person is allowed to give away $18,000 without impacting their lifetime estate and gift tax. So if she is paying less than that amount, you might write it off as a “gift” to her thus only owing income taxes on any amount exceeding that $18,000 annual total. (And if she is married, and the house is in joint name) they you could give $36,000 combined to her and your son-in-law.)
Again, you need to document this loan, it must carry a proper rate of interest, and document whether the payments are just for interest, or for interest AND principal. And for that you need to consult an attorney for starters.
I do NOT recommend a do-it-yourself approach, but for background on what’s needed read this.
