Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< My fiance and I are house shopping. A family member has offered to "loan" us the money for a house, as long as it goes in my name (and not both of ours). How will this affect us when we file our taxes once we are married? Do we need to file separately? Because we have no mortgage interest, is there any other deductions we can make or is it possible we might be penalized? >>

OK, first let's get rid of those quotation marks and find out what's really going on. If the relative is giving you a gift of the money to buy the house, I'd recommend that you write a nice thank you letter and put the house in your name alone. You can always convey joint title down the road, handling "God forbid" transfer through your will in the meantime.

If the relative is loaning you the money, make sure that the paperwork is in order and that the loan is secured by the property. The relative is going to have interest income anyway, so you might as well get the deduction for residence mortgage interest.

There are few occasions when one is required to file married, filing separately. Separate ownership of property is not one of them.

I'm not sure what you mean by "penalized" in your last question. Even if you have no mortgage interest you'll have real estate taxes. If you don't have enough itemized deductions to make it worth your while, then you'll use the standard deduction.

You might want to do some reading in IRS Publication 936 and also take a look at the Schedule A to see what itemized deductions are available.

Phil Marti
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.