Mortgage Interest & Property Tax Deduction

[lmbaez10]

I am a co-owner of a property (listed on the deed). However, I am not on the mortgage but pay a portion of the mortgage. The property tax on the home is paid through the mortgage company. Would I be able to claim both mortgage interest tax deduction and property tax deduction? Or one instead of the other? The other owner has another home where he maxes out his tax deduction limit and we file taxes separately. Filing together is not an option at this time. 

[TomD8]

Yes, as a co-owner you may deduct the portion of the mortgage interest and property tax that you actually pay.  If you are an owner, it is not necessary for your name to be on the mortgage in order for you to deduct the portion of the mortgage interest that you actually pay.

[Russhamy]

Another related question.

Girlfriend and I own house can one of us take the mortgage interest write off  and one take the property taxes ?

Thanks

[ColeenD3]

@Russhamy

Yes, as long as you qualify. You have to be liable for the debt and pay the debt. While you may both own the house, only someone listed on the mortgage and actually pays it can claim the expense. In the same way, only the person who actually pays the property tax can claim it.

[Russhamy]

Our names are on both.

[ColeenD3]

@Russhamy

In that case, it is up to you both how you want to claim the deductions. You can see who benefits the most, decide to alternate years, each take one deduction or split them 50/50. It may be that just taking a portion of the the entire amounts doesn't do much to make a big difference between itemizing and taking the standard deduction.

[JGTMoney]

My girlfriend and I own a home together and we are currently in the process of breaking up and selling the house. The mortgage is in her name, since she had better credit when we purchased the house, but we are both on the deed/title and are "tenants in common." We have both evenly split the cost of the mortgage and utilities in 2019. For my taxes this year, do I have a right to claim 50% of the mortgage interest deduction even if she disagrees and demands to get it all? She has done that in the past even though we were still a couple, despite the fact that I felt this to be unfair. Thank you!

[TomD8]

@JGTMoney --  See this:  https://ttlc.intuit.com/community/credits-and-deductions/help/how-do-i-deduct-mortgage-interest-if-i...

[JGTMoney]

Thank you! I feel like, since I'm on the deed and we are tenants in common and I pay half the mortgage, it wouldn't be an issue for me to claim half of the deduction. I guess my question is do I have a RIGHT to that deduction if it's a situation where my ex-girlfriend argues that she should get all of it since the mortgage is in her name. Can you help me answer that question? Thank you!

[TomD8]

Did you pay the mortgage out of a joint account, or did you each pay your portion out of your own individual account?

[JGTMoney]

I transferred it monthly into a joint account that we used to pay the mortgage.

[TomD8 · Accepted solution]

Treas. Reg. §1.163-1(b) provides that even if you’re not directly liable on the mortgage, you can deduct any interest you pay on the debt as long as you are the legal owner of the house (e.g., a deed holder).

https://www.govinfo.gov/content/pkg/CFR-2012-title26-vol2/pdf/CFR-2012-title26-vol2-sec1-163-1.pdf

Since you and she are both on the deed, you can each legally deduct the mortgage interest.  Since it was paid out of a joint account, it's up to the two of you to decide what percentage each gets to deduct.   Usually in these situations the split is 50/50.

[JGTMoney]

Thank you! What if she demands that she gets it all even though she only paid half. Can she do that? 

[TomD8]

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. 

[mei_luu]

I have a similar question, where do I report the split % in TurboTax? I can't find a question related to this. Since there is also a loan amount cap for claiming interest, do we split loan amount, interest, and property tax, instead of using the whole numbers on 1098?