Yes, it is deductible just as if you were making payments to a traditional lender. The main difference is that the seller may not provide monthly statements to you, and also may not provide you a 1099 after the end of the year to show you how much interest you’ve paid.
So it’s up to you to keep records and do caculations. Keep cancelled checks and/or bank statements so you can prove the payments you’ve made. Also, if it’s an amortized loan, you’re going to have to figure out how much of your payment has gone toward interest. Anyone who knows how to use a financial calculator can figure this out, so if you’re not handy with one yourself, just find someone to print out an amortization schedule for you so you can know how much interest is paid each year. Good luck to you.
I think so, but the IRS has a question web site.
If it’s a principal residence or an investment property and you itemize.
IRS publication on Home interest deduction: http://www.irs.gov/publications/p936/ar02.html#d0e1835 and or: http://www.irs.gov/faqs/faq3-6.html
IRS: Tax information when buying a home: http://www.irs.gov/publications/p530/ix01.html
IRS: Deductible costs when purchasing real property:
http://www.irs.gov/publications/p551/ar02.html#d0e2000
IRS: 3.6 Itemized Deductions/Standard Deductions: 6. Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses): http://www.irs.gov/faqs/faq3-6.html
Buena Suerte
it is income..
numerous ways to claim this…
but it is income..
It really depends on what your buying, normally you don’t get a tax deduction on interest. I would say the answer is No.
Yes, it is deductible just as if you were making payments to a traditional lender. The main difference is that the seller may not provide monthly statements to you, and also may not provide you a 1099 after the end of the year to show you how much interest you’ve paid.
So it’s up to you to keep records and do caculations. Keep cancelled checks and/or bank statements so you can prove the payments you’ve made. Also, if it’s an amortized loan, you’re going to have to figure out how much of your payment has gone toward interest. Anyone who knows how to use a financial calculator can figure this out, so if you’re not handy with one yourself, just find someone to print out an amortization schedule for you so you can know how much interest is paid each year. Good luck to you.