Mortgage Interest

[Denne]

I have a friend just aske me a question that I am very uncertain how to answer. She has been living with mother for several years. Her mother passed away leaving the house to her.....along with a mortgage payment. She has been paying the payment for four years, since it is the only the payment could be make. Her mother had nothing else that would pay the mortgage and in fact the daugher paid the mortgage many times when her mother was alive. The daughter us unable to finance the home in her name because of some old debt she has. What she was asking is how she can claim the mortgage interest on her taxes..... The 1098's she showed me are in the Estate's name...of course the estate can't pay the mortgage and she can and needs to in order to have a place to live. Your suggestions????? She has already tried to put the mortgage in her name since she is paying the payments, but can't until her finances improve. Quite a mess, huh?

Thanks for your advise.....

[jainen]

>>Quite a mess, huh?<<

Nope. At least, not if she can show that she is the heir. I'm surprised the lender is having a problem correcting title on a seasoned loan, so maybe they are doing her a favor by not invoking a due-on-transfer clause. Has she recorded new title down at the courthouse--maybe SHE is the one balking because she doesn't want her creditors to find that asset? In any case, have the estate issue a 1099 as a nominee, or simply take the deduction and respond honestly with excellent documentation to the IRS letter, if any.