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Is interest paid on a promissory note, irs deductible as home mortgage interest if the promissory note is not recorded.

Melbourne, FL |

We would like to offer our daughter a private loan for her to purchase a house. Is it necessary to record a mortgage with the county for her to be able to deduct mortgage interest on her irs tax return? Naturally, we would declare interest income as well (to the irs) but we figured we might protect our investment by including our names on the deed.

Attorney Answers 1

  1. The loan does not necessarily have to be secured by the home for the interest to be deductible, but I highly recommend that you record a mortgage to secure your loan. No need to put your name on the deed, just record a mortgage.