Q. Can we choose who takes the interest deduction?
A. Simple answer: yes.
Q. Based on our incomes and other deductions, it would be most advantageous for me to claim the entire mortgage interest deduction and her to take the standard deduction. Is this permissible?
A. Yes. And that is exactly the smart way to do it. But document your activity.
Q. Is this likely to raise any red flags, given that she is listed first on the mortgage and the 1098?
A. Yes. That's why you need to document. Paying from your account is the most important documentation.
Unmarried couples claiming mortgage interest.
You pretty much have a choice. One can claim it all or you can split it. It's usually best if only one claims it, allowing the other to use the standard deduction.
You have to meet the rules, which are:
- You are legally obligated to pay it
- You actually pay it. Paying from a joint account where you made sufficient deposits to cover the payments will probably meet this standard. However, paying from your own account would be a stronger audit defense.
