It’s been years since I did Sub 2’s, and wonder if there is any present day problem with the IRS when deducting mortgage interest on a Sub 2 property?
In the “old days”, I just listed it as interest on a rental property (the only thing I did with them) until I sold the property.
I’m not asking for legal advice, but would like to hear from members of the community here.
Thanks in advance.
It’s actually… not a problem…
it’s actually not a problem for the owner of the property to deduct it…
been doing these deals since 1997…
Basically two requirements to deduct the mortgage interest:
- You own the property, and
- You make the payments
Former owner still gets a 1098 form from the mortgage company, but he can’t deduct it because he doesn’t meet the above requirements. You don’t need a 1098 form to deduct the interest as the new owner.
This is not a big problem you own the property and make the payment.