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DEAR BRUCE: My husband and I are currently employed, and we are ever so grateful in this economy. Between the two of us, we bring in just enough to cover our essential bills. My parents are currently renting out a property they own to my sister and her family for $600 a month. They want to give us that $600 a month to pay down our loan. They would have us continue to pay our mortgage, which is about $925 a month, and apply this $600 to the regular payment of the loan. My thinking is that we are so strapped right now that it would be better to apply the $600 per month to the $925 mortgage, and we would pay $325 a month. In short, my thinking is that we could really use that extra money now as opposed to paying down a mortgage that still won’t be paid off within the next few years. — Wendy, New Jersey

DEAR WENDY: Under many circumstances, the donor should have the ability to decide how the money is to be spent as a condition of the donation. That observed, since you are struggling and your life would be a great deal more pleasant if you could apply the $600 to your current mortgage payment, I would encourage you and your husband to talk to your folks. While they may be anxious to see you reduce your mortgage, quality of life has a lot to recommend, and since you are living so close, I would urge them to allow you to use the money as you feel best.

DEAR BRUCE: I recently took over my mother’s accounting. She was a full-time RV resident for many years, and someone told her that she didn’t have to file taxes since she made less than $7,000 a year, so she didn’t file for all of 30 some years. This year, because of her age and my becoming her caretaker, both of our names are on her checking and savings accounts. She is getting interest statements from the bank. The interest earned is below a total of $600 for the year. If she filed now, could she be liable for 30 years of nonfiling? Can the IRS hold me responsible for the interest? — Julie, via e-mail

DEAR JULIE: The current threshold for filing for a single person over 65 is $10,750. If you wanted to go back over a number of years, you’d have to find out how much that number has increased each year. On balance, it would appear that your mother had no obligation to file. Further, with the little bit of interest she is earning now, there will be no taxes due.

Technically, you are an owner of the checking account, and the feds recognize that lots of people are doing what you are doing for an elderly parent. I wouldn’t worry about it. From everything you have told me, there are no liabilities to be concerned about.

Interested in buying or selling a house? Let Bruce Williams’ House Smart be your guide. Price: $14.95, plus shipping and handling. Call 800-337-2346.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.