travistee2
Active Member
What is the name of your state? VT
The property was a large old farm house in a small town. It was converted to a hotel. Because of Covid the state did not allow rooms to be rented. It could not be left empty so the owner converted it to apartments. It wasn't making enough money. The elderly owner made a deal with a man who used to be the handy man/ repairs. She didn't have a lawyer. The handyman/new owner, with his lawyer, made a deal with her. In the contract she gave the property to the new "owner" in exchange she was given a room that she can live in rent free. She thinks that he owns it now. She is 78 with no income other than social security.
The mortgage remains in her name. The new owner gives her a check each month to pay the mortgage that is still in her name.
I told her that she is still the owner and there was no closing with the bank . I told her that the money he pays her is income and the interest she pays on the mortgage is still tax deductible. She doesn't have a lawyer or an accountant. I think there are multiple issues regarding his/hers taxes and the bank not knowing about this deal. What legal/accounting/tax issues in this crazy deal?
The property was a large old farm house in a small town. It was converted to a hotel. Because of Covid the state did not allow rooms to be rented. It could not be left empty so the owner converted it to apartments. It wasn't making enough money. The elderly owner made a deal with a man who used to be the handy man/ repairs. She didn't have a lawyer. The handyman/new owner, with his lawyer, made a deal with her. In the contract she gave the property to the new "owner" in exchange she was given a room that she can live in rent free. She thinks that he owns it now. She is 78 with no income other than social security.
The mortgage remains in her name. The new owner gives her a check each month to pay the mortgage that is still in her name.
I told her that she is still the owner and there was no closing with the bank . I told her that the money he pays her is income and the interest she pays on the mortgage is still tax deductible. She doesn't have a lawyer or an accountant. I think there are multiple issues regarding his/hers taxes and the bank not knowing about this deal. What legal/accounting/tax issues in this crazy deal?