Unlawful Tax Deductions For A Home

[questionstoday]

My parents (listed as husband and wife) and I are on the deed to my house. I remortgaged 3 years ago and am solely responsible for the note, but didn't know that they were still on the deed. We have not spoken to each other in about a year.

I have lived in the house since the purchase and have paid all bills concerning the house. They convinced me to let them claim the tax deductions on it for the first 7 years of ownership. I then found out that they were claiming me as a renter and they were claiming a loss on the house. They did provide me the initial downpayment of $18,000. My Dad told me that he would rather give me the money now, verses leaving it to me when he dies. Now, in order to get them to quit claim the house to me, I am prepared to offer them the $18,000 minus the tax deductions.

Is that unreasonable?
Is claiming me as a renter against the law? and if so, can they still incur tax penalties for it?
Will a judge grant them half their share of the house if they do not agree to sign?

[Mr. Knowitall]

Whatever you can negotiate and decide is reasonable? That's reasonable. Will your parents act unreasonably? That's a family relationships question, not a legal question.

They shouldn't have claimed you as a tenant. Whether or not there could be tax consequences depends on how long ago that happened.

The manner in which the property is titled could affect a judge's determination, as might evidence of how payments were made, who paid for maintenance, who paid taxes, etc. - but if you're going to take this to court, consult a lawyer.