How do I claim the taxes on a property owned by my mother? 1 Answers as of April 04, 2011

I originally owned an income property (fourplex) signed over title to mother four years ago, I have continued to claim on my tax returns and mother never touched any moneys. Lender modified mortgage that decreased principle 248k and sent 1099-c in her name and SSN. She already filed her taxes. How do I handle this? Btw property has devalued by more than 400k in past four years.

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Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
You do not and cannot claim the taxes on the property as such realty is no longer your property. Once you deeded the property to her you lost the right to take any tax deductions for mortgage interest real estate taxes, or for passive losses. You have erroneously and illegally claimed these deductions on your return over the last four years and you are obligated to file amended returns to correct your errors. As for your mother, she needs to file an amended return to account for the Form 1099-C. You really need to get tax advice BEFORE you engage in transactions and documentation that can have a disastrous impact on you and other family members.
Answer Applies to: Pennsylvania
Replied: 4/4/2011
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