Hi there.

We've been technically renting our new home from my father in law because he sold a rental property to help us purchase this home. Unfortunately, he figured the best way to do it was to purchase the home as a rental property and have us technically rent it from him (we're paying "rent" in the amount of the mortgage).

At the time, we were planning a wedding, and it seemed like a good idea as a temporary situation - whereas we would eventually transfer ownership to our names.

Now, my father in law is telling us that we should leave it "as is" because its a hassel in terms of taxes. To me, this seems like a really bad idea because we can't claim taxes for any renovations we're making (which are quickly adding up), and eventually when its time to sell the home, well - its not in our names. In fact, our names don't appear anywhere except as tenants.

Is there a quick and easy way to transfer the ownership of the rental property to our names - OR make the property a non-rental in our names. I was thinking maybe the best thing to do would be to transfer it to his duaghter (my wife) because they are related?

We don't know very much about real estate law or the taxes involved in what we did / want to do. Any help is greatly appreciated.

Anyone?

Am I correct that having the home in our names is the best course of action?

Even if you owned the place, you would not be able to claim deductions for most fixups, so that part should not be a big factor for you. You may want to see if you can do a lease option purchase, meaning your rent counts toward a set purchase price in some way if you exercise an option to purchase the property. Another option is to just ask him if you can buy the place outright. It is not your fault about the state transfer taxes, as that exists whether the property is sold to you or another party. You may have to see about breakin the lease or giving notice under the lease and getting your own place if there is no progress toward selling you the place. It is a tough choice.