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Posted by L K Williams on June 24, 2007, 10:41 pm
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> I recently took a loan from my father to pay off the bank
> loan on the house. I signed a note for the loan and had it
> notarized. My father declares the interest he gets on his
> taxes and I deduct the interest I pay on mine. My brother's
> accountant made a form 1098.
>
> Is this going to show up as a debt of mine when going for
> financial aid?
From you post, you may not be eligible to deduct the
interest you pay to your father. He must declare the income
but you don't appear to meet the requirements for deducting
mortgage interest. Just drawing up a note and having it
notarized is not sufficient. It helps to prove that there
is an obligation but still not sufficent to support a
deduction. To be deductible as mortgage interest, the
payments to your father must have a valid lien on your
property. That is, he must have a mortgage and it must be
recorded with the appropriate local agency.
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