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cstabell
New Member

mortgage interest

I helped my dependent son buy a home in 2023, which I am a partial owner of. I provide approximately 1/3 of his support. Can I deduct the interest we are paying on the loan? If yes, how do I do that?

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3 Replies
TomK2023
Expert Alumni

mortgage interest

Yes, if you are a co-owner of the property, you can deduct that portion of the mortgage interest that you actually paid.

 

Please see this TurboTax FAQ: How do I deduct mortgage interest if I co-owned the home?

 

@cstabell 

 

[Edited 2/05/24 | 12:19PM CST]

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mortgage interest

Here's a thought that I hope a tax expert will chime in on. From the information you provided, your son doesn't qualify as a dependent. You might be able to claim the home your son is living in as a second home that you and he bought together. The mortgage deduction allows you to deduct the interest on your main home and one second home. You don't have to live in the second home at any time during the year. This will allow you to deduct the you on your main home and your portion of the second home up to the IRS limits on mortgage deductions.

 

Translated from Pub 936:

If your son received the Form 1098 showing the interest paid, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of your son. Deduct your share of the interest on Schedule A (Form 1040), line 8b, and print “See attached” next to the line.

 

Similarly, if you're the payer of record on the mortgage, deduct only your share of the interest on Schedule A (Form 1040), line 8a. Let your son know what his share is.

mortgage interest

1. You can deduct interest if you are a legal or equitable owner, even if you are not listed on the mortgage itself.  (I'm going to ignore the concept of "equitable owner" because you say you are a legal co-owner.

 

2. You can deduct interest on your main home and one second home.  If you want to designate your son's home as your "second home" for the interest deduction, that's fine.

 

3. However, your maximum mortgage indebtedness for this deduction is $750,000, so that might disallow you depending on the size of your own home mortgage (if any) plus this mortgage.

 

4. You can your son can split the interest based on how much each person pays.  However, because of the high standard deduction, it will usually be better if one person claims it all and the other claims nothing.  (For example, you could say that he pays 100% of the house and your support pays for other things.  Or vice versa.)

 

5. You can't combine to claim more than the total interest paid.

 

6. If the 1098 is in your son's name, you would enter the interest as if it were on a 1098 and check the box for "someone else's name is on the 1098."  There is an old IRS instruction to attach a written statement to your tax return, but Turbotax does not allow attachments for e-filed tax returns.  So I would just report the interest and see if they send you a letter asking questions.

 

7. You can also deduct property taxes on any property you own (located in the US).  It does not have to be your residence. However, there is a $10,000 cap on all state and local taxes, so again, it may not help you to split this deduction.

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