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My parents are retired. They own their home. I have the thought of supplementing their retirement with a big cash injection by purchasing their home, and charging them monthly only what it takes to cover the mortgage (which they can take out from cash proceeds). This benefits them by investing or enjoying most of the proceeds now... (and I realize that long term it's my problem) It benefits me by having a tax write-off today, (not saying that I'm in Virginia, and they are in Iowa, which means tax deduction for visiting the folks).

What do Ya'll think?
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kraber:

Going on the information available, this is a technique that has been used in the past and works. Questions to be considered are:

1. Do both of your parents like this idea?
2. Do you have any siblings; and if so, what are their thoughts?
3. What happens when your first parent passes away?
4. What if the surviving parent marries?
5. What if the surviving parent 'takes in' their own brother/sister to help each other in their mature years?
6. In the case of question #5, what is the plan if your surviving parent passes next?
7. If your parents are only covering the cost of your mortgage payment, who pays for general upkeep maintenance? Who pays for a 'remodeling'?

Just a few things to consider. I wish you the best.

--WauseonFox--
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My parents are retired. They own their home. I have the thought of supplementing their retirement with a big cash
injection by purchasing their home, and charging them monthly only what it takes to cover the mortgage (which they can
take out from cash proceeds). This benefits them by investing or enjoying most of the proceeds now... (and I realize
that long term it's my problem) It benefits me by having a tax write-off today, (not saying that I'm in Virginia, and they
are in Iowa, which means tax deduction for visiting the folks).

What do Ya'll think?


Good idea, but:

The rent charged has to be close to market value. May have to increase rent. At year end you could make one gift to then to offset the increased rent.

What happens if you die? Maybe get mad at your parents and want to through them out? Ok you won't do that but you may have an automobile accident and lose all your assets in a law suit.

You want a longterm lease for your parents. The lease should last their livetime. Let them have an out if they want to end the lease.

I think you have to think of protecting your parents no matter what happens and will need an attorney in their state to draw up the lease. The attorney may advise to file the lease so that it is a public record.

If you died haveing realestate in another state this can be a problem in probate. Look into taking title in the home in a trust if it will help with probate.

Be reasonalbe in the trip deductible expenses.
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