Need Help With Tax Advice

Discussion in 'Community Discussion' started by nickarmadillo, Jun 15, 2011.

  1. nickarmadillo macrumors regular

    Joined:
    Jan 24, 2003
    Location:
    St. Louis, MO
    #1
    Anyone here have any experience with US tax code and mortgage interest deductions? I'm trying to structure a family loan and need some advice.

    More specifically, I have a 30-year mortgage of $119,200 that I am getting through a family member rather than a bank, as they were able to offer a lower rate. The rate will have to be at the June Federal Applicable Rate (long-term) of 4.05%, correct?

    <http://www.irs.gov/pub/irs-drop/rr-11-13.pdf> - June 2011 FAR Ruling Link

    The mortgage is structured thusly:

    purchase price: $149,000
    Down Payment: $29,800
    Original Principal: $119,200
    Start Date: June 23, 2011
    First Payment Due: Jule 23, 2011
    Annual Interest Rate: 4.05%
    Periods Per Annum: 12
    Late Penalties: None
    Monthly Payment: $572.52

    I will be paying my own taxes and insurance rather than having the lender hold them in escrow.

    We are doing the note paperwork through the title company and it will also be secured by a deed of trust which will be registered with the county clerk.

    The lender will file a 1098 at the end of the year and I will list all interest payments on my itemized deductions on my annual tax return.

    So, essentially what I need to know is if that is all that I need to do to get my mortgage interest deduction. Is there anything else? Thanks so much. I'm buying my first home and it is all a bit overwhelming right now.
     
  2. miles01110 macrumors Core

    miles01110

    Joined:
    Jul 24, 2006
    Location:
    The Ivory Tower (I'm not coming down)
    #2
    You need to consult with a tax professional, not ask a tax question on an internet forum.
     
  3. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #3
    Never ever get tax advise from the internet. What might sound logical and correct may not be correct and the IRS will come down on your like a ton of bricks.

    At the very least give the IRS a call on what you're looking to do to see if its allowable. They're very helpful, once you get through the voicemail system.

    I've called them on a number of occasions as a church treasurer needing to know about reporting requirements. They were very helpful and pointed me to the proper publication that documented what they were stating.
     
  4. nickarmadillo thread starter macrumors regular

    Joined:
    Jan 24, 2003
    Location:
    St. Louis, MO
    #4
    I've consulted with an accountant, but just wanted to verify what he said. I know there are a few others on here who are familiar with tax issues.
     
  5. miles01110 macrumors Core

    miles01110

    Joined:
    Jul 24, 2006
    Location:
    The Ivory Tower (I'm not coming down)
    #5
    Then go to a tax professional. Is your accountant a tax professional? If so, you likely do not need a second opinion.

    Anyone can say they know their way around taxes on the internet. For instance... the advice you got sounds good to me.
     
  6. mobilehaathi macrumors G3

    mobilehaathi

    Joined:
    Aug 19, 2008
    Location:
    The Anthropocene
    #6
    Asking tax advice on the internet is never a good idea.
     

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