Living in apartment in one state- Own a house in different state

I live in apartment in NY but have a house in NJ where my in-laws stay. I pay half the mortgage for that house but my wife's parents (who live there) claim the house on their return (last 2 years). This year i am planning to claim it on my tax return (married-jointly). Can i do it? Do i have to file for 2 states? Any complications? Appreciate your suggestions.

Home loans

You only need to file multiple state tax returns if you have income in different states. Just having a house in another location does not require you to file a state tax return.

 

You can deduct all the property taxes that you pay worldwide, subject to the $10,000 On state and local taxes. You can deduct mortgage interest on your main home and one second home.  

 

In order to deduct property taxes however, you must be the person against whom the taxes are assessed. Meaning you need to be the owner of the property, or at least one of the co-owners on the deed, or married to one of the owners, since marriage imports ownership for tax purposes.  And you must actually pay the taxes. You can’t deduct and expense you don’t pay, even if you are allowed to deduct it.

 

To deduct the mortgage interest, you must be the person against whom the mortgage interest is billed. This means you must be the owner or one of the owners of the property, and you must be listed on the mortgage as one of the obligated borrowers.  And of course, you must actually pay the expense that you want to deduct.

 

Whether you are allowed to deduct the half of the expenses that you paid this year will depend on your ownership and legal situation with regard to the mortgage. Whether your in-laws were allowed to deduct their share of expenses in past years depends on the same factors.