Mortgage Interest Question

[michaelcottier]

Hi! I have a home that is in my name, but my sister lives in it, and pays the mortgage on it. She doesn't want to use the mortgage interest as a write off, so my question is, can I use the mortgage interest on my taxes, even though I do not pay the mortgage on the home, or live in it? Thanks!

[xmasbaby0]

If your sister's name is not on the deed or on the mortgage, your sister cannot enter anything about the mortgage interest on her tax return, whether she wants to or not.   You own the home, so you you are the one who can enter the interest and property taxes paid if you are itemizing deductions.   But.....is the amount she is paying fair market rent?   Provide some details.

[michaelcottier]

Actually her name is on the deed, but not the mortgage! And she pays exactly what the mortgage total is every month.

[xmasbaby0 · Accepted solution]

Oh---then she could itemize and enter the interest since she is the one paying it and her name is on the deed, but perhaps she does not have enough other things to exceed her standard deduction and will not be able to use the interest.   You do not pay the interest, so no, you cannot deduct it on your own tax return.

[michaelcottier]

Ok got it! Thank you for all of your help 🙂

[Opus 17]

To deduct mortgage interest on schedule A, you must be an owner of the home, and be the person who actually pays the interest.  You don't have to be a named borrower on the mortgage.  However, since you don't pay the interest, you can't deduct it.  

In some cases, if your sister paid you rent (such as, exactly equal to the amount of the mortgage), you could report the property as a rental property and deduct the interest as a rental expense.  But this won't be allowed here if she is a co-owner of the property.