DEAR BOB: I was intrigued by the recent item in your column where two brothers own a property but the mortgage lender advised refinancing in only one brother’s name because the other brother had bad credit. You said each brother can claim his share of mortgage interest actually paid. Is there an IRS ruling on this issue? As I have a similar situation, when I contacted the IRS they told me if my name is not on the mortgage I cannot deduct the interest paid – Victor M.
DEAR VICTOR: Please don’t rely on information you receive from the IRS. Although the IRS agents do their best, survey statistics show they are often mistaken. Nobody can know the answer to every tax question.
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If your name is on the title to a property, you are legally obligated to make all mortgage payments. Should you fail to pay, you could lose the property by foreclosure.
The property owner’s name need not be on the mortgage obligation to be entitled to deduct the mortgage interest actually paid. Millions of homeowners have purchased their property on land contracts for deed or “subject to” an existing mortgage without formally assuming it. They are “equitable owners” entitled to the interest deductions.
Please consult your personal tax adviser for full details.
VERY FEW RESIDENTS ABUSE AMERICANS WITH DISABILITIES ACT
DEAR BOB: Thank you for running that item a few weeks ago about the blind apartment tenant with a guide dog whose barking disturbs other tenants. As a landlord, I had a similar situation. Although I have a “no pet rule” I knew I had to allow service dogs for handicapped tenants. A nice young man who claimed to be handicapped said he had a “service dog” to help with his mental condition. He showed me some paperwork. It was fake. I foolishly rented him a garden apartment with a fenced patio. The neighbors soon informed me he had a pit-bull dog and was running a “puppy mill” with another dog. He paid the rent on time but refused to allow me to inspect. After noisy barking, and the neighboring tenant moving out, I hired an attorney to evict my so-called “handicapped tenant.” It cost me $2,400 in attorney fees and payment to the tenant to move out. As a sympathetic landlord, what could I have done to prevent this? – Robert N.
DEAR ROBERT: Did you check references of the applicant’s two previous landlords? That’s what I do. The current landlord might lie to get rid of a bad tenant. But the previous landlord will usually tell the truth.
Very few tenants abuse the Americans with Disabilities Act (ADA). But a few do. Your tenant was obviously not handicapped and was running a pit bull breeding operation.
YOU CAN HAVE AWFUL CREDIT AND STILL OBTAIN A REVERSE MORTGAGE
DEAR BOB: I am 68 and am interested in a reverse mortgage. But I have bad credit. I am trying to pay my bills on time. Do I have to wait until my credit report improves? – Theresa J.
DEAR THERESA: No. Your credit rating has nothing to do with obtaining a reverse mortgage. Also, you don’t need to be employed. But you do need to be a homeowner at least age 62 with a small or no mortgage. Details are in my brand-new special report, “The Whole Truth About Reverse Mortgages for Senior Citizen Homeowners,” available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF download at www.bobbruss.com. Questions for this column are welcome at either address.
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