[[4 years ago my sister, Dad and I bought a house. For the past 4 years we've split the mortgage interest 3 ways and wrote that off for each of our taxes. My portion was about 10K/yr. The IRS has the address of this house as my main address.]]Ok...if you all lived there together as your principal residence...no problem. But if only one of you lived there, it is very likely that the other two owner's interest deductions are limited...or should have been limited. But that's not your question, so I'll move on.[[ This year, I bought my own house.]]Congrats...[[ Now my dad is paying the entire mortgage on the 1st house and I don't want (can't) to take deductions on that property anymore. My name is still on the house, nothing has changed]]Well, you also have to be on the MORTGAGE in order to get the deduction anyway...the home ownership is only one piece to the puzzle. And it sounds like you guys have complicated things pretty well as it is.[[ I won't take the mort. interest deduction for the 1st house anymore, because now I have a mort. deduction from my new house. My question is: Since I will have a new address on my tax return and since the mortgage interest deduction changed (now 15K), will this red flag anything for the IRS?]]Not necessarily....but it could be a problem if the IRS can't track the disposition of the "old" property. The IRS doesn't look and compare from one year to the other. Each year stands alone. But make sure to complet an IRS change of address for to notify them of your change of address. You can find this form at the IRS web site.[[ I ask because I read in the E&Y tax book that one obvious red flag was having a mort. interest deduction w/ change of address and not showing a sale of the old property.]]This is true...to a degree....just like I noted above. So while it may increase you audit exposure, it may not necessarily guarantee an audit.[[ Will putting my new address on my federal & state tax returns nullify my need to submit a change of address form?]]Yes...but the change of address form works faster and better. So I would suggest that you use it. [[ Is a change of address that big a deal to the IRS???]]Yup...they need to keep track of you if or when they have tax issues that they want to discuss with you. And not only that, there are certain items that they may have to mail to you that are requried by law to be forwarded to your last known address. So the change of address for is really for YOUR protection.TMF TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
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