Transfer from a parent to save on tax return?

sgalla04 · Joined: 09 Sep 2008 Posts: 5 2.30 Dollars($)

I make more money than my mother (I make $60k and she makes $20k) who is paying off a mortgage. If I do the Quit Claim Deed can I then deduct the interest and property taxes (~$8,000/yr) from my return?

If I deduct the $8,000 I would get back $2,500. But if she deducts it she will only get back $1,000. We would save an additional $1,500. Is this possible to do?

helping_user · Posted: Wed Sep 10, 2008 3:28 am Post subject:

Welcome Sgalla.

To deduct the interest on your tax return, you should have your name on the mortgage as well as on the deed. If the property taxes are paid separately then you can still deduct such taxes on your return even though you may be on the deed but not on the mortgage.

Thanks.

Guest

How do I get my name onto the mortgage and the deed? That is the question. I know if it is in my name I can write it off but what is the process of putting it into my name? I am not paying a realitor 3% to do the process. What is the cheapest way to transfer the mortgage and deed so I can deduct the interest and property taxes instead of my mother deducting?

Jessica · Posted: Thu Sep 11, 2008 10:10 am Post subject:

Hi Stev,

The cheapest way to get your name on the mortgage is to do a novation, that is, simply getting the loan transferred in your name. However, you need to satisfy the qualifying criteria - credit record, debt to income ratio, income etc so that the lender agrees to allow for a novation.

However, if novation is not what the lender want, then you'll have to refinance the loan in your name. But you'll have to pay the closing costs which can go up to $4000-$5000 depending upon the state you are in and the lender you're dealing with.

Regards,

Jessica.

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