Section 1.163-1(b) states that “Interest paid by the taxpayer on a mortgage upon real estate of which he is the legal or equitable owner, even though the taxpayer is not directly liable upon the bond or note secured by such mortgage, may be deducted as interest on his indebtedness.”
So technically, you each can deduct only the portion of the mortgage interest that you actually paid.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
