Tax question

[ChevyMan1972]

Hey,

 

Wife and I do our own taxes have for about 4 years now, but here is the question we have. We have a mortgage 5th Third, (Our condo), we have a family living in it under land contract, basically, they give us the money each month to pay the mortgage, now when we get the year end statement showing the interest do we / can we use that interest in our taxes?

 

We are living in another home under land contract, we pay another party 2 year land contract house payment w/ 4.5 % interest, which we got the tax form to claim on our 2012 taxes.

 

Can we use both interest on our 2012 taxes. The payment we pay to live in our current house is payed of, no current mortgage against it other than the land contract we pay the other party..

 

Not too sure if we screwed up when we filed our taxes can someone please help??

 

Thank you,

 

Daniel

[2highpsi]

Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.

 

http://www.irs.gov/publications/p936/ar02.html

 

Edit:

 

Misread your question. None the less, the correct answer should be found somewhere in that publication.

[ChevyMan1972]

I understand that, but the family that lives in our condo, signed an actual Realistate contract pending credit approval at the end of this year will sign over the FHA loan to them.. it is not a "rental"

[2highpsi]

I understand that, but the family that lives in our condo, signed an actual Realistate contract pending credit approval at the end of this year will sign over the FHA loan to them.. it is not a "rental"

 

Yeh I caught that and put the Edit in my post reflecting it.

 

Somewhere in the publication I linked should answer your question. I *believe* however if you have a legal (recorded) land contract, the new owner has the right to deduct the interest and not you.

 

Now if you you don't have a recorded land contract, and you merely have a written agreement hinging on their ability to get a loan, that sounds more like a "lease-buy option" which is a whole different animal.