Hello, I need to find a federal case and supporting precedence for the following situation using checkpoint: Parents hold the mortgage and deed to real estate property but their adult daughter lives in the residence and pays the mortgage. Her parents purchased the residence for the daughter because she did not have a sufficient credit rating to allow her to purchase the home. The monthly payment includes taxes and insurance and the daughter is responsible for repairs and maintenance. May the daughter deduct the mortgage interest or would the mortgage, taxes and insurance payments be considered rental income to the parents? Solution This is the situation where parents are investing in a house where the parent is the owner/investor and the child is the owner/occupant. One of the most popular arrangements is a Shared Equity Financing Agreement (SEFA). In this type of deal, the parent and child jointly purchase a home.Child and parent take their proportional share of property tax, maintenance, repair, and mortgage interest deductions. Rent payments are taxable for the parent as an owner/investor. However, the parent is entitled to deduct his or her share of expenses including the mortgage interest, the property taxes, insurance, maintenance, and utilities on income tax returns. Bank will will classify this as a residential loan that has a lower interest rate rather than as a rental property. Supporting precedence for the following situation using checkpoint: 26 U.S. Code § 280A - Disallowance of certain expenses in connection with business use of home, rental of vacation homes, etc. This is the website you can refer: https://www.law.cornell.edu/uscode/text/26/280A .

1. Hello, I need to find a federal case and supporting precedence for the following situation using
checkpoint:
Parents hold the mortgage and deed to real estate property but their adult daughter lives in the
residence and pays the mortgage. Her parents purchased the residence for the daughter because
she did not have a sufficient credit rating to allow her to purchase the home. The monthly
payment includes taxes and insurance and the daughter is responsible for repairs and
maintenance. May the daughter deduct the mortgage interest or would the mortgage, taxes and
insurance payments be considered rental income to the parents?
Solution
This is the situation where parents are investing in a house where the parent is the owner/investor
and the child is the owner/occupant. One of the most popular arrangements is a Shared Equity
Financing Agreement (SEFA). In this type of deal, the parent and child jointly purchase a
home.Child and parent take their proportional share of property tax, maintenance, repair, and
mortgage interest deductions. Rent payments are taxable for the parent as an owner/investor.
However, the parent is entitled to deduct his or her share of expenses including the mortgage
interest, the property taxes, insurance, maintenance, and utilities on income tax returns. Bank
will will classify this as a residential loan that has a lower interest rate rather than as a rental
property.
Supporting precedence for the following situation using checkpoint: 26 U.S. Code § 280A -
Disallowance of certain expenses in connection with business use of home, rental of vacation
homes, etc.
This is the website you can refer:
https://www.law.cornell.edu/uscode/text/26/280A