0
Nothing that is included in the above information would make the interest payments on the family loan deductible on your 1040 income tax return.
To be deductible on your 1040 federal income tax return it would have to be a legal qualifying mortgage.
Or legal collectible loan for a business or investment purposes, etc.
Both you and the lender must intend that the loan be repaid. In addition, there must be a true debtor-creditor relationship between you and the lender.
*The mortgage must be a secured debt on a qualified home in which you have an ownership interest. (Generally, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. The term "qualified home" means your main home or second home. For details, see Publication 936.)
For more information go to the IRS gov web site and use the search box for publication 936
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Is the interest deductible when you use a home equity loan to pay off a second mortgage?
The interest on the second mortgage is deductible but not the home equity loan. If you could deduct the interest on the equity loan also, then you would be double dipping and the IRS doesn't like that. In every situation, one party can and the other party can deduct the interest. Someone has to pay tax on the money transfer.
Can you deduct interest on a home loan taken out from a relative not from a bank?
Here's what I found so far: To deduct interest payments paid as itemized home mortgage interest, the loan obligation must be secured by a recorded mortgage or deed of trust against the home. This can be doneby their signing and recording a mortgage or deed of trust to secure the promissory note.
How can an interest on personal or credit card loan spent to purchase a home be made tax deductible?
One of the conditions for deducting mortgage loan interest is that the loan must be secure by a properly recorded lien on the property. If the person or company giving you the loan is not getting a lien on your property, you cannot deduct the interest. There are also several other conditions. Take out a home equity line of credit instead.
Can you write off a first mortgage on your tax returns?
No, but if you deduct you should be able to write off the interest on a mortgage loan. Contact a tax professional for details.
Can you deduct interest from personal loans?
No way, no how. ----- This answer is incorrect. You CAN deduct interest from personal loans in some circumstances. If you're a business owner and take out a personal loan for business expenses, you CAN deduct the interest as a business expense. If you own a rental property and use a credit card to make repairs to the property or take out a personal loan to make improvements, you CAN DEDUCT the interest from your taxes. The IRS has entire chapters devoted to this topic on its web site. Maybe the confusion is that for tax purposes it is the use of the interest/loan, not if your a Corporation/LLP/Trust/Proprietorship, etc. It is interest for "personal use" that has a problem. Correcting the above, back to the original: The examples given are NOT personal interest. They are loans made for a business purpose. They are loans taken, or expenses, incurred in the course of making taxable income. (Like interest on the margin account on your stock investments may become deductible). The only personal interest that may be deductible is on qualifying mortgages for a house. Interest on a corporate credit card that someone incurred for purchasing say haircuts for their own use, would NOT be deductible.
Can you deduct interest from a signature loan?
"Personal" interest is NOT deductible.
Can I deduct interest on a personal loan used for home improvements?
no
Is money that you loan to someone taxable?
A loan from a family member is considered taxable income. The borrower can deduct a certain amount of the interest paid. The lender will have to pay taxes on any interest earned.
What is better 3 percent loan where you cannot deduct interest for tax purposes or 5 percent loan where you can deduct interst from you income tax?
It simply depends on your own personal tax situation.
Is the interest deductible when you use a home equity loan to pay off a second mortgage?
The interest on the second mortgage is deductible but not the home equity loan. If you could deduct the interest on the equity loan also, then you would be double dipping and the IRS doesn't like that. In every situation, one party can and the other party can deduct the interest. Someone has to pay tax on the money transfer.
Can you deduct interest on a home loan taken out from a relative not from a bank?
Here's what I found so far: To deduct interest payments paid as itemized home mortgage interest, the loan obligation must be secured by a recorded mortgage or deed of trust against the home. This can be doneby their signing and recording a mortgage or deed of trust to secure the promissory note.
If you cosign a student loan can you deduct the interest if the first party does not?
http://www.ird.gov.hk/eng/faq/ctr.htm#item5 I doubt it.
How can an interest on personal or credit card loan spent to purchase a home be made tax deductible?
One of the conditions for deducting mortgage loan interest is that the loan must be secure by a properly recorded lien on the property. If the person or company giving you the loan is not getting a lien on your property, you cannot deduct the interest. There are also several other conditions. Take out a home equity line of credit instead.
Can car loan interest be claimed when filing personal taxes?
No, car loan interest cannot be claimed when filing personal income taxes. One can, however, deduct some costs of upkeep (or mileage) if the individual can demonstrate that the car was used for business and that they were not reimbursed for such usage.
Can you write off a first mortgage on your tax returns?
No, but if you deduct you should be able to write off the interest on a mortgage loan. Contact a tax professional for details.
Can you deduct interest from personal loans?
No way, no how. ----- This answer is incorrect. You CAN deduct interest from personal loans in some circumstances. If you're a business owner and take out a personal loan for business expenses, you CAN deduct the interest as a business expense. If you own a rental property and use a credit card to make repairs to the property or take out a personal loan to make improvements, you CAN DEDUCT the interest from your taxes. The IRS has entire chapters devoted to this topic on its web site. Maybe the confusion is that for tax purposes it is the use of the interest/loan, not if your a Corporation/LLP/Trust/Proprietorship, etc. It is interest for "personal use" that has a problem. Correcting the above, back to the original: The examples given are NOT personal interest. They are loans made for a business purpose. They are loans taken, or expenses, incurred in the course of making taxable income. (Like interest on the margin account on your stock investments may become deductible). The only personal interest that may be deductible is on qualifying mortgages for a house. Interest on a corporate credit card that someone incurred for purchasing say haircuts for their own use, would NOT be deductible.
Is an interest only loan a good idea?
The best type of loan that one can get is an interest only loan if they are not able to make large payments for a period of time. However, if one only pays the interest on the loan, the principal itself will never decrease leaving you in debt longer.
