The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: House for Neice - anything taxable ?||Date: 2/8/2000 2:13 PM|
|Author: TMFTaxes||Number: 27852 of 121482|
TMF Taxes said...
<<"Which is money that you guys fronted to the kids. I'm guessing that you don't have any type of lien or mortgage against the property...so any interest that the kids are paying would also not be deductible. This can be fixed with a simple 2nd TD placed against the property. If you are not charging them interest, then you might have some problems with the imputed interest rules...as was mentioned in the prior post.">>
And JAFO responded...
<<I rarely disagree with Roy, but I fear his distaste for these kinds of deals might be blurring his vision.
The kids do not own the property, so they cannot grant a 2d lien agaisnt it. Title was taken, apparently (and presumably), by aunt, uncle and wife's sister (mother of the niece). In addition, it is very likely that existing first lien contains a "due on sale" or "due on encumbrance" clasue that would allow the first lender to call its loan if the owner of the property placed a 2d lien against the property without the first lender's consent.>>
Absolutely correct, my friend. If you don't own the property, you can't grant a 2nd TD. Reading and typing too fast...thinking too little.
Where are all of these question in June and July???
Thanks for the correction!!!
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