cross-border intra-family mortgage questions

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leggwork
Posts: 5
Joined: Tue Aug 23, 2005 10:51 am

cross-border intra-family mortgage questions

Post by leggwork »

My son's grandparents, who live in Canada, are generously offering him a private mortgage to replace what would otherwise be a second mortgage on a house purchase in Colorado.

If my son wishes to be able to deduct the interest on this private mortgage on his taxes, do his grandparents just generate a form 1098 at year end? Do they have do do anything re US taxes on the interest or on their Canadian return?
Does the IRS require that the loan is officially recorded as a mortgage with the county?

thanks,
bruce
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