Estimated tax tip savings. The mortgage interest deduction created $18,000 per year of extra deductions for Sue Davis—even though the mortgage she paid was not in her name.
Tax law has an amazing break for unconventional homeowners: You can deduct your mortgage interest payments even when the deed to the house and the mortgage are in someone else’s name.
Sue Davis, one of our subscribers, emailed us about this very situation. Since Sue could not personally qualify for a home loan, her parents stepped in to help—they bought the house on her behalf and signed the mortgage. However, Sue lives in the home and pays all the expenses of the property, including the property taxes and the mortgage.
Using a little-known tax rule, we helped Sue get a full deduction for her mortgage interest payments. This was a huge boost in tax savings for Sue, not only in the current tax year but also for the three prior years, since she was able to amend her prior returns and add back the additional deductions.
If you are in a similar situation, you can get these tax breaks too. You simply need to ... Log in to view full article.