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  1. #1
    Sue252 Guest
    My husband is buying a house for his daughter in Conneticut(she can't get a loan) which both his daughters and their kids will live in. She will be responsible for mortgage payment, taxes and repairs etc. The broker is telling him to do a quitclaim deed to his daughter as soon as they close. this was supposed to be so we don't get treated as landlords with a rental--Is this right or not? We close on Wednesday. Thanks

  2. #2
    loku Guest
    I think the advice was accurate as far as it went. The amounts the daughter pays would be in exchange for living in the house, so they would be rental income to your husband. However, that may have some tax advantages to him. He would be entitled to a deduction for interest paid on the loan, depreciation on the house, and property taxes paid. Thus, he could end up with a tax loss on this.
    Another alternative would be for him to enter into a contract of sale with his daughter. The payments she makes would be part or all of the payments due him on the purchase price.

    The quitclaim deed would be a gift to her, and he would still be liable for the mortgage.

    I would suggest he have a CPA assess this and decide which of the alternatives is best. It could make a considerable difference to him.

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