Tax question

[dralarms]

Need someone that is in tax business to answer a quick question.

My son bought his house from a party, paid interest on it for 15 years but was not able to claim the interest sine legally the house was still in the other guys name.

He has now paid it off and owns it lock stock and barrel. How can he file the interest? Or can he?

Thanks

[Hozzie]

No, you can only claim it in the year he filed.  He will not get to deduct any of the interest.

 

I am not a tax advisor so he may want to call one, but I am pretty sure he can't, especially retroactively.

Edited January 13, 2016 by Hozzie

[dralarms]

Yea. That's what I thought. Thanks.

[spurge]

Without knowing more details you will get incomplete advice.

He may be able to if he itemizes his taxes only for the amortized amount. He would need to put the party's tax ID on the return as the entity he paid interest to. It is just like someone that has a traditional mortgage. This sounds like a seller financed mortgage. In general, he can amend his taxes for the past few years.

I second the advice to talk to a tax professional. Good luck.

[Oh Shoot]

.... In general, he can amend his taxes for the past few years.

 

"three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later."

 

- OS

[spurge]

True

[dralarms]

Question has been asked and answered. Can we lock this before it goes down hill?

[Hozzie]

You lock it yourself.  Click the Topic Moderation link at the top by the first post and lock it.

[Oh Shoot]

You lock it yourself.  Click the Topic Moderation link at the top by the first post and lock it.

 

That's only available in Trading Post forums.

[Hozzie]

Ahh, didn't ever pay attention to that I guess.  Thanks for the correction.

Edited January 14, 2016 by Hozzie