Tax Treatment for Subject-To Homes

[Christopher Brainard]

I had a question and was going to post it here before talking to my CPA. We have a house we took subject to the existing financing earlier this year. At the end of this year, I assume the previous owner is going to receive a 1098 with the mortgage interest paid noted on it. I assume they can't take this deduction, since they do not live in the house, and as the owners we would be able to write off the interest as a business expense. Is there anything tricky beyond that I should consider?

-Christopher