My mother is RE (not sure if I'd call her FI) who recently used all of her nest egg (and there's nothing left now) to place a 75% down payment on a house. Since she only has a small rental income and no W2 income, she needed me to apply for a mortgage with her as I have a small W2 income and great credit. Because of this, I am also on the title 70 her/30 me.
But what's done is done--I'm not asking for face punches about this house purchase or shared mortgage, etc. It's already caused us enough stress and emotional toll as it is. (I've been a reader long enough, though, to know that there will probably be some words said about this arrangement anyway.)
My question is this: when I signed the bank's paperwork, I had to agree that this house would be my primary residence. Before I signed, I told them upfront that I wouldn't be living there, just my mom. (I have my own apartment.) The mortgage broker told me if I didn't sign, they wouldn't approve the loan. (She said it nicer than that, but that was the bottom line.) As for the tax benefit, since my mom needs the money more than I do, I'm willing to let her take the full deductible/credit/whatever it is, even though we're 70/30. However, since I said it would be my primary, do I need to move in with her to be kosher with the IRS? Or, do I need to change my official address but continue to live in my apartment, where I've already lived for almost three years, and no one will be the wiser? Or, if I'm willing to give her 100% of the tax benefit, does it matter? Can she even HAVE 100% of the benefit, despite the structure of the title? If I have to claim the 30%, can I claim that, my apartment rent as a partial tax credit (it's an option here in CA), and still keep my address the same?
She promises that she's going to either refi or pay off the mortgage as soon as possible so that I can be taken off the mortgage and thus the title (I'm not exactly holding my breath), but in the meantime, I'm not really sure what I'm supposed to do to avoid an audit and be lawful AND still not move in with her (living together would be disastrous).
I'm sure I'm way over thinking this and that I'm envisioning problems where there aren't any, but before I ask an accountant, I thought I'd take the pulse of the collective wisdom of Mustachians.