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Claiming mortgage, rent income, and depreciation when my name is not on the documents

Hi,

 

I have a few questions. I'll start by giving the situation.

 

'Property' is currently jointly owned by my mother and I, so I am on the deed. The mortgage has only my mother and father's name on it. I am paying the mortgage fully (and, therefore, the property tax as well since it is part of the mortgage payments). Only my mother lives at this property. A room at this property is also rented out; the lease has my mother named as the landlord. Rent payments, therefore, are going directly to my mother. My mother then sends me 90% of the rent payment.

 

Question 1: Is it appropriate to fully claim the mortgage interest on my taxes, since I am the one actually making the payments?

 

Question 2: Is it appropriate to claim 90% of the rental payments that is being sent to me on my taxes as income and the rest of the 10% on my mother's, since that is how it is being distributed in the end?

 

Question 3: Is it appropriate to fully claim the rental property depreciation on my taxes?

 

Help on any of these would be appreciated.

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1 Best answer

Accepted Solutions
PaulaM
Expert Alumni

Claiming mortgage, rent income, and depreciation when my name is not on the documents

Sounds like your mother and yourself are joint property owners and joint rental (of room) property owners. 

1. You can only claim rental mortgage interest and property against rental income for the % that the room represents to the entire home. For ex: If the home is 1500 sq. ft and the rented room is 144 sq ft., then approx. 10% of those two costs could be considered a rental expense. The remaining 90% is personal and you can deduct that on Schedule A if you itemize your deductions. 

2. You can decide how you want to divide rental income anyway you wish with your partner. The IRS will be concerned only that the total 100% of the income is being reported between the two of you.

 

3. As noted in number 1 before, the expense of depreciation can only be deducted in the ratio % of the room/home sq. footage. The easiest way to accomplish this is to do the math before entering in TurboTax and list the room as if its own property. So continuing with example footage, figure out what 10% of the home and land cost is and enter those amounts along with the placed in service dates in the Asset/Depreciation section of your Rental Summary page. 

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3 Replies
PaulaM
Expert Alumni

Claiming mortgage, rent income, and depreciation when my name is not on the documents

Sounds like your mother and yourself are joint property owners and joint rental (of room) property owners. 

1. You can only claim rental mortgage interest and property against rental income for the % that the room represents to the entire home. For ex: If the home is 1500 sq. ft and the rented room is 144 sq ft., then approx. 10% of those two costs could be considered a rental expense. The remaining 90% is personal and you can deduct that on Schedule A if you itemize your deductions. 

2. You can decide how you want to divide rental income anyway you wish with your partner. The IRS will be concerned only that the total 100% of the income is being reported between the two of you.

 

3. As noted in number 1 before, the expense of depreciation can only be deducted in the ratio % of the room/home sq. footage. The easiest way to accomplish this is to do the math before entering in TurboTax and list the room as if its own property. So continuing with example footage, figure out what 10% of the home and land cost is and enter those amounts along with the placed in service dates in the Asset/Depreciation section of your Rental Summary page. 

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Claiming mortgage, rent income, and depreciation when my name is not on the documents

Thanks Paula!

 

I should have rephrased questions 1 and 3, but I think it's implied in your answer. I realize the depreciation calculation; I was concerned about me claiming the depreciation and mortgage interest in my taxes, rather than my mothers', since her name is on the mortgage and lease.

PaulaM
Expert Alumni

Claiming mortgage, rent income, and depreciation when my name is not on the documents

If you share in the home maintenance and repairs as a co-owner, then you don't need to be the one on the note. 

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