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Bubzeebub192
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Posted: 11 Feb 2009 at 13:25 \| IP Logged

I'm posting this because I believe there are those of you that are more knowledgeable of tax issues than I. Here is the scenario:

Taxpayer's parents passed away several years ago. Taxpayer continued to pay the mortgage and taxes on the home. Supposedly there was a will, however, the county records still show the parents as the home owners and thus are sending tax bills addressed to the deceased parents. Apparently, the property was to be given to the taxpayer AND the taxpayer's sibling. First question is, can the taxpayer claim the interest/taxes AND what steps must the taxpayer (and sibling) take to get the property in their name before they sell the home?

Edited by Bubzeebub192 on 11 Feb 2009 at 23:06

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vicky
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Posted: 12 Feb 2009 at 01:22 \| IP Logged

I am not 100% sure about the taxes and mortgage interest but since the taxpayer was not obligated to pay for either, I don't think it is deductible.

The first thing is to change the mailing address in the property tax records, so bills get sent to the taxpayer. This does not put the house in the taxpayer's name. If there is a will, it has to be probated to distribute the assets. I am not familiar with all states, I can only tell you that the will in TX must be probated within four years or the deceased is considered to have died intestate which is much messier and more expensive. If it is a small estate in TX, which consists of a home and minimal assets, a small estate probate will take of things cheaply and quickly - again, I don't know how it works in other states. Since mortgages generally can't be assumed and the house will be sold anyway, once the court clears, the taxpayers should try to sell the house and not bother to have the asset first transferred in their personal names. Best is to contact an attorney specializing in this.

dmatharu
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Posted: 13 Feb 2009 at 16:27 \| IP Logged

You need to get the mortgage changed into your name first. Easily done. Call the mortgage company and show them that you have been paying the mortgage for at leat the last 12 months. checks from your bank account will help you put your name on the mortgage deed.
Taxes can be changed as well by doing a deed as well.

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vicky
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Posted: 13 Feb 2009 at 19:52 \| IP Logged

Have you ever done this or is this a suggestion that you think just makes sense? What is a mortgage deed? There is a deed and a deed of trust which are both an issue here but there is nothing such as a 'mortgage deed'.

I make my living in real estate and I own quite a few houses. Many years ago, people would be able to buy a house and get the mortgage transferred to their name. Not any more. Try do a subject-to and you will trigger the due on transfer/sale clause and yank the whole thing into foreclosure. Some commercial real estate is done with conduit mortgages, but not for residential. I am doing a refinance in a few days and it takes about 50-100 pages of forms and supporting documents. In this banking mess you will definitely need a bit more than 12 canceled checks. Because of the borrower's risk, someone who shows up with a couple of canceled checks does not have entitlement to get it changed to his name.

A deed is signed by the owner to transfer the property, not by the one who receives it. If the owner is deceased, you will have to go through the proper channels e.g. probate/court to transfer it.

dmatharu
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Posted: 13 Feb 2009 at 22:15 \| IP Logged

Vicky,
If you are a mortgage broker then you will know that after the 12 months of payments one can be put on the title deed. Correct! So why not take that route and put the payer of the mortgage on that title deed and then deal with it from there.
Yes there is going to be some probate work if only the deceased had left the property in trust then it would have been easier.
The 1098 is reported in the deceased name hence there is no linkage to the person who is paying the mortgage and the real estate taxes.
I know you are a real estate person and are getting little annoyed by my not using the right terms but Vicky it is something they can look at and see. Not very difficult to do. They have been paying the mortgage and real estate taxes for several years and the Bank will be willing to put their name on the title rather than go the foreclosure route. It is not a good route for the bank to take at all in this climate either.

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