Can I as the consigner take all the depreciation on my taxes

[Ivan M.]

Besides the point of not doing business with family...I'm purchasing a house for my mom who will pay me rent. To get a better interest rate and rate on property taxes she has offered to be on the mortgage and deed. Again, I will pay everything myself (small mortgage, insurance and taxes) and technically don't need a co signer but it seems silly not to take at least consider this option. My question is can I take all the depreciation on MY taxes being a co signer (non occupying)? Again, I will be paying everything anyway. Besides this question, I'm open to any other thoughts (besides the issue of don't do business with family). FYI. Shes getting older and is simply tired of being a homeowner. She has more money in the bank than I do. She wants to be able to call someone should repairs etc. be needed. Thanks!

[Linda Weygant]

Originally posted by @Ivan M.:

So I have gotten two differing opinions from two CPAs. One says sure, the IRS will strictly follow the money. If they see that I'm making the mortgage payments, insurance, taxes, and claiming rent, etc. then i should depreciate the rental and right off the appropriate expenses. Another CPA says, I can't do that because one of the people on the title / mortgage is actually living in the house so technically it's not a rental. Both said i could definitely include the 1098 form on my taxes.... anyone else care to chime in? Another way to look at it is: does the property tax savings and better mortgage rate outweigh depreciation and repair right offs, etc.....Am i wanting my cake and to eat it too?

I'm with the second CPA on this one - one of the owners is living in the house, therefore it is not a rental.  You can claim property taxes and interest on your Schedule A as a second home, but the way you're setting this up, essentially your mom is just giving you money to make the mortgage payment with and maybe a little extra.  It's not rental income to you because she can't rent a property she already owns.  You cannot write off any of the other expenses, including depreciation - and you certainly shouldn't be writing anything off on a Schedule E.

You're definitely trying to have things all ways - Homestead Exemptions are for owner occupants as are favorable interest rates.  But you then want the depreciation deduction as though it's a rental and there is no way those two situations are consistent.