Lease Purchase and Tax deduction

[Patrick Shep]

I've been proposed with a "Lease purchase" deal. Owner would lease to me $300/month and then at 4 years there will be a balloon payment due. I would be responsible for all expenses (taxes, insurance, etc). Does anyone know if I would be able to deduct expenses on my taxes if I don't techincally own it? I know I can ask my CPA, but interested if anyone else has experienced this? They prefer rent to own so they dont have to foreclose on anyone and can evict. They know I would be renting it and not living in it.

[Joe Villeneuve]

The way the agreements are set up here is strange...and not really a Lease Option.

1 - There is no "Balloon Payment" in a Lease Option.  There is a purchase contract which happens as a separate contract when the option contract is executed.  

2 - The Option Contract is an agreement between 2 parties where the seller gives the option buyer the exclusive right to buy the property for an agreed upon amount, within a certain time period.  The Option Agreement isn't a down payment, or any other form of purchase.  It's just an agreement giving the potential buyer exclusive right to buy the property "if" they choose to.