JAFO,Unless I read the original post wrong, this isn't a mortgage, it's a personal loan. The interest which the child pays to the parent in exchange for the parent lending the child the money is income to the parent. Unfortunately, the child cannot deduct the interest since, I assume, the loan is a personal loan and not associated with any business or investment purpose.It's no different than when you "lend" money to a bank by opening a savings account. The interest they pay you for the privilege of using your money is taxable to you and is reported on a Form 1099.I just checked the instructions for Form 1099-INT and the child does not have to issue a 1099 to his parents. But the interest is still income which should be reported on their return.Ira
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