Can you sell a home on a contract for deed if you are still making mortgage payments on it? We are thinking of selling to our daughter who can't qualify for a loan at this time. We have been told she can refinance later and then pay us off. Another question... if her payment to us covers our mortgage payment, who deducts the interest? Who deducts the property taxes? Do we have to claim some income on her payment? Is it legal to keep our mortgage and sell at the same time. We could use some advise. Thanks.

On a contract for deed you still own the property, she is only paying on a contract for the deed, So you not your daughter could deduct the interest. But remember this is no longer your principal residence, so it wll not quality as such either for the interest.

Who ever actually pays the tax can deduct the tax, that should be included in the contract.

You will have to treat this as income property, the amount you get will be income, the amount you pay out will be expenses, so if they pay more than your payment, you may have income unless you have other expenses to off set this.

Most states allow a contract on a home with a mortgage, normally this contract is not recorded but notorised and keep for enforcement at a latter date