Intrafamily Home Mortgage Not Recorded Not Deductible

Loaning money to your kids can be a great planning maneuver.  It is critical that you follow all the formalities to avoid nasty surprises.  In the recent Tax Court decision in the case of Christopher DeFrancis and Jennifer Gross it was the borrowers that got the nasty surprise.  They borrowed $427,333 from Jennifer's mother, Joan Gross, on January 1, 2003.  They signed a note and a mortgage.  The mortgage was on their residence in Northampton, Massachusetts (A lovely city by the way).  ...