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In most instances, interest can be deducted only by the person or entity that is legally responsible for the debt. However, a potential exception appears in Regs. Sec. 1.163-1(b), which states:
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 the mortgage, may be deducted as interest on his indebtedness.
https://www.thetaxadviser.com/issues/2012/jan/tpp-jan12-story-01.html
There have been numerous Tax Court cases since then, affirming this concept, of which your CPA should be aware.
In most instances, interest can be deducted only by the person or entity that is legally responsible for the debt. However, a potential exception appears in Regs. Sec. 1.163-1(b), which states:
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 the mortgage, may be deducted as interest on his indebtedness.
https://www.thetaxadviser.com/issues/2012/jan/tpp-jan12-story-01.html
There have been numerous Tax Court cases since then, affirming this concept, of which your CPA should be aware.
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