Mr. Hyre: Who claims the interest? - Posted by Dawn

Posted by JHyre in Ohio on May 07, 2002 at 06:46:41:

You are entitled to an interest deduction, because in the eyes of the tax laws, you became the owner from the date of execution of the land contract, even though you do not have title. Don’t worry about whether the seller is taking a deduction, that’s irrelevant.

John Hyre

Mr. Hyre: Who claims the interest? - Posted by Dawn

Posted by Dawn on May 06, 2002 at 20:39:29:

Mr. Hyre – It was suggested in the main news group that I repost this question here, for you. Thanks for your help:

Hello everyone!

Almost five years ago, I bought my first house in KY on a land contract. I live in this house. I made payments to the bank that held the seller’s mortgage, as per our contract, until the bank was sold to another bank. At that point, the seller was told by the new bank that they could not or would not honor our land contract and that I would have to pay him directly, which I have done since then. This was approximately a year or two into the contract (which IS recorded at the courthouse, by the way). The contract does not specify who claims the interest on the mortgage payments. We both have a mortgage on the same house. Does he claim it because the deed hasn’t transferred into my name yet or do we both have a right to claim it since we both are paying interest on our respective mortgages or do I claim it because I’m the buyer? I have not been claiming it. It adds up to a pretty good chunk of money that I could definitely use. This is a five-year balloon that is coming due in November. Should I do amended tax returns immediately? If so, I could use this money to put on the balloon payment and have some money to work with for another house or two. I really appreciate your responses and LOVE this site!!!

Thank you