I am new to investing and I am curious who claims the interest paid on the mortgage for tax purposes while the subject-to mortgage is in place?
Also, does the seller have to be present at closing when the investor ultimately sells the property (as in the lease/option scenario)?
I’m not sure how others structure their deals, but in Texas the owner does not have to be present when you sell the house. What is your exit strategy?
The way I understand it is the mortgage interest is claimed by whoever has the burden of paying for the property. If you sell on a wraparound mortgage and convey title the new owner gets to claim the mortgage interest and county taxes. I assume this is what you are doing because of the question you asked. If it isn’t please clarify what information you need.
When buying a property subject-2 you are getting title to the property so the seller is no longer involved when you sell.
As far as interest, whoever pays it, can claim it. You need to make sure your seller doesn’t try to claim it and have an understanding how it will be handled the first year you take it over. Ideally you get the mortgage company sending you all mortgage related information, 1099’s etc.