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Reload this Page Contract for Deed Taz ramifications

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Old 01-09-2007, 02:24 PM
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Contract for Deed Taz ramifications

What is the name of your state? Arizona.

I am thinking of selling a house to my son on a contract for deed. I have 2 questions. First question - can my son claim a tax deduction for his payments to me? 2nd question - his payment to me will not cover my mortgage payment, can I claim a loss on my tax return?
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Old 01-09-2007, 08:11 PM
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Quote:
Originally Posted by wendajames View Post
What is the name of your state? Arizona.

I am thinking of selling a house to my son on a contract for deed. I have 2 questions. First question - can my son claim a tax deduction for his payments to me? 2nd question - his payment to me will not cover my mortgage payment, can I claim a loss on my tax return?
If you draw up a proper contract for the sale, then yes, your son can deduct the mortgage interest even if you are the lender.

No, you cannot claim a loss. If you are selling the house for less than its fair market value, then you are making your son a gift of the remaining value. If you are giving your son a lower interest rate than yours, then again its a gift.

Even if you had a true loss on the property, you don't get a tax deduction for a loss on the sale of your principal residence.
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Old 01-11-2007, 05:44 PM
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Nor can you deduct a loss from a sale to a related party.
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