Level 3

Buy out equity in home of non-spouse's share, does interest qualify as qualified mortgage interest.

Forum|Forum|2 years ago
November 26, 2023
1 reply
6 views

Hello Taxpayer buys out another person's share of a house that is used as taxpayer's principal residence. The other owner is a child of the taxpayer and the buyout will be paid via a mortgage. Will the interest paid on the buyout mortgage qualify as mortgage interest and this deductible?

Thank You

Steve

sjrcpa

Level 15

If it meets all of the criteria for a mortgage, it could qualify as mortgage interest on a second home.

The more I know the more I don’t know.

BobKamman

Level 15

@sjrcpa Where do you see it's a second home? I read it as this being the taxpayer's primary residence. (" a house that is used as taxpayer's principal residence") But the cast of characters here is confusing, and the mention of a "non-spouse" in the heading but not the text sets off alarm bells. It would be helpful to have a better description of the parties involved. For example, "Dad lives with Son. Son owned the house until he added his wife's name as co-owner. Now Son is getting a divorce and Dad is buying out Ex-Wife so that he can continue living there." But your guess is as good as mine.

sjrcpa

Level 15

@BobKamman I think I misread it as taxpayer' child lived in it.

To rephrase my answer, if it meets all the requirements of a mortgage, then taxpayer can deduct the mortgage interest.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded