Cosigning with child on a home mortgage - can I claim it as an investment property

[Anonymous]

Plan to buy a second house under my name for my child to live in and rent it to him and claim it as an investment property. However there are of course higher rates associated with a loan on an investment property. Can I instead cosign a loan with my son, and since he is the primary house resident, get the non-investment interest rate and claim the house as an investment propoerty on my taxes?

[Anonymous]

Why would your child accept the debt without home ownership?

[Anonymous]

Anonymous wrote:Plan to buy a second house under my name for my child to live in and rent it to him and claim it as an investment property. However there are of course higher rates associated with a loan on an investment property. Can I instead cosign a loan with my son, and since he is the primary house resident, get the non-investment interest rate and claim the house as an investment propoerty on my taxes?

Mortgage and tax fraud - a two-fer.

[Anonymous]

Are you cosigning with your child or are you buying it to rent to your child? Your post doesn't make sense.

[Anonymous]

Mortgage and tax fraud - a two-fer.

+1

[Anonymous]

If it's investment property it's investment property. Treat it as such and don't involve your child in your scam.

[Anonymous]

Anonymous wrote:

Mortgage and tax fraud - a two-fer.

+1

Yup.

[Anonymous]

Try to explain this to an IRS auditor.

[Anonymous]

Anonymous wrote:Try to explain this to an IRS auditor.

why would an IRS auditor care? She has to claim the income and deduct the expenses but the auditor does not care what interest rate the mortgagee charged. In fact, she could deduct more with the higher interest rate she is trying to avoid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Try to explain this to an IRS auditor.

why would an IRS auditor care? She has to claim the income and deduct the expenses but the auditor does not care what interest rate the mortgagee charged. In fact, she could deduct more with the higher interest rate she is trying to avoid.

Bc what OP is thinking about doing is a fraud.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Try to explain this to an IRS auditor.

why would an IRS auditor care? She has to claim the income and deduct the expenses but the auditor does not care what interest rate the mortgagee charged. In fact, she could deduct more with the higher interest rate she is trying to avoid.

Yeah, it's possible this is only mortgage fraud and not tax evasion. Which I assume is what OP was originally asking. OP does not seem to be worried about the "committing fraud" aspect of it.

[Anonymous]

Hey, if it's legal it's legal.

However, if I were your child, I would not agree to being liable for a mortgage without adequate independent means to pay for it. And if my name was not on the deed, it would be out of the question.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Try to explain this to an IRS auditor.

why would an IRS auditor care? She has to claim the income and deduct the expenses but the auditor does not care what interest rate the mortgagee charged. In fact, she could deduct more with the higher interest rate she is trying to avoid.

Yeah, it's possible this is only mortgage fraud and not tax evasion. Which I assume is what OP was originally asking. OP does not seem to be worried about the "committing fraud" aspect of it.

I wouldn't worry so much about it either. The mortgage company charges a higher rate for investment oroperty because if yo get into financial trouble you are more likely to default on a investment mortgage over your home mortgage. I still think the bigger problem is saddling son with a debt and no ownership of the home. Why not actually consign for him and both go on the deed? If that doesn't work out then you can rent it to a third party, no fraud involved.

[Anonymous]

Sorry for typos, am on the phone.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Plan to buy a second house under my name for my child to live in and rent it to him and claim it as an investment property. However there are of course higher rates associated with a loan on an investment property. Can I instead cosign a loan with my son, and since he is the primary house resident, get the non-investment interest rate and claim the house as an investment propoerty on my taxes?

Mortgage and tax fraud - a two-fer.

How is it mortgage fraud. The reason for the higher interest rate is that you may not get a renter that can pay etc. If you are a primary resident, you are less likely to default. Child is resident.
How is it tax fraud? Owner is parent and pays for all maintenance costs and interest and mortgage.