Real estate rental - Owner's son - Borrower and Landlady mother - tax treatment
January 21, 2013 | 40,00 EUR | answered by StB Steffen Becker
Topic: Real estate rental condominium
Owner: Son
Borrower: Mother
Situation:
Son wants to rent out the condominium in the future.
If Son acts as the landlord, he must also pay taxes on the rental income but cannot deduct the loan interest.
Questions:
1. Can the mother, as the landlord, make the rental contract and then claim the loan interest on her tax return, even though she is not the owner (loan agreements are for this condominium - mortgage is also registered on this condominium)?
2. What about depreciation, since the son is the owner?
Background information: The loan was made by the mother at that time because the son had just started his own business and unfortunately a loan was not possible at that time.
Dear inquirer,
Thank you for your inquiry. I will answer this within the scope of an initial consultation based on the information provided. Missing or inaccurate information can affect the legal outcome.
1. The mother cannot rent out the apartment because she is not the owner (§ 39 para. 1 AO).
2. In the case of renting out, the son can claim depreciation since he is the (economic) owner of the apartment.
One way to deduct the loan interest as advertising costs would be to have a loan agreement between the mother and the son that meets the arm's length principle.
I hope I have been able to provide you with a brief overview of the tax situation. However, in order to make a comprehensive and more specific statement, detailed information about your personal circumstances will definitely be needed.
Sincerely,
Steffen Becker
-Tax Advisor-
stb-becker@arcor.de
... Are you also interested in this question? 
