Legal Question in Real Estate Law in New Jersey

Re: deed

Your aunt can give you a deed for the property. However, many mortgages have a due on sale clause which may cause a problem. I would talk to the mortgage company and obtain written permission.

Re: deed

A simple Deed of transfer could resolve this, but be aware that the bank holding the mortgage could call it under the terms of the mortgage. Several things you could do: (1) Check to see if the bank will call the mortgage if the Deed is your name. (2)If this (calling the mortgage) is a possibility, simply add your name to the Deed along with that of your aunt, indicating the ownership as 99% you, 1% your aunt. This will allow you to claim 99% of the deductions from the date of the Deed. Since you were not in title for 2004, if you want to claim the interest and tax deductions, your aunt needs to file a Form 1098 and Form 1096 with IRS, using the same numbers as reported on the Form 1098 she received from the mortgage company. This shifts the deductions to you, but requires your aunt to both resport the payments, as if you paid her and she paid the mortgage company. While she reports these amounts, she gets a corresponding deduction on her return for the interest and taxes paid. If she is eligible to itemize on her tax return, this should be a wash to her (same income and deductions) and allow you to deduct the payments. Since I do not know the amounts involved, nor your aunt's other income, I cannot opine on what the ramifications may be on her return. If you need more information, contact me directly.