I bought a house with a friend as co-borrower, and we split all costs 50/50. This is a secured loan, we used it exclusively on the house purchase, and the house is our primary residence. I understand that I am able to deduct my half of the mortgage interest deduction (or, to be precise, the two of us can deduct up to the full amount in the 1098), but am confused about two related details:
- the outstanding principal is more than the $750,000. Do we *each* report the *full* outstanding principal, or should I only report half of the outstanding principal?
- can I deduct my half of the property tax paid, or does one borrower deduct the entire amount?
Thank you in advance
You would each report half of the outstanding principal since you are splitting the interest.
You can deduct half of the property tax since you split the costs 50/50. As long as both of you are liable to pay the tax bills, you may enter half of the real estate taxes as a deduction.