In most cases, where someone who is not an owner of property pays mortgage payments and property taxes, neither the IRS nor the courts allow that person to take a deduction for the interest paid on the mortgage or the taxes. However, the Tax Court made a rare exception in the case of Qui Van Phan v. Commissioner when is allowed the petitioner to take deductions for mortgage interest paid in 2010. In 2008, the petitioner moved into a house in California to help his mother, who was unable to care for the property. He lived at the property during 2010, and had an agreement to purchase it, but was unable to get the financing that year. He paid the mortgage that year. In addition, his mother and father, who had title to the house, were getting a divorce. In 2011, his sister and sister-in-law refinanced the mortgage loan and in 2013, petitioner’s name was added to the legal title. When the petitioner tried to deduct the mortgage interest for 2010, the IRS claimed that since he did not own the property and was not legally obligated on the mortgage, he could not take the deduction. But the Tax Court pointed out that there is an exception in the regulations for “equitable title.” And the court said that the petitioner had provided enough evidence to show that he had equitable title in 2010 which became fee title in 2013, so he was entitled to the deduction.
Probate and Estate Planning News
