Purchasing a house with our daughter

[bensonfitch-iclo]

We jointly purchased a home with our daughter, and we all contributed to downpayment and to ongoing mortgage.  My SSN is given and will receive the interest deduction.  What things do I need to be aware of?

[NateTheGrEAt]

Hi @bensonfitch-iclo - thanks for your question!

There's one piece of information that wasn't in your question - namely, who lives in the house? All of you? Or just the daughter?

If you all live there and jointly contribute to the mortgage payment, then you're all entitled to deduct your share of the interest paid. (For example, assuming there are 3 of you, and you made equal payments, you would each deduct 1/3 of the total mortgage interest). Since your SSN is on the Form 1098 that the lender sends, you will report this as interest on a Form 1098. The other co-owners would report their portion as interest not on a Form 1098, since there is no 1098 in their name/SSN. 

If only the daughter lives there, depending on whether the house could be considered a second home for you, you might be able to have the same treatment. You are allowed to deduct mortgage interest on a first and second home. 

I hope this information was helpful!

[bensonfitch-iclo]

Our daughter lives at the house and we do not, although we visit and stay there at times.

[NateTheGrEAt]

As long as you aren't already paying mortgages on two other houses besides the one your daughter lives in, you should be okay to consider this house a second home for you and deduct your share of mortgage interest and property taxes. 

So, if you only have your principal residence and this house, you're good. If you have another house in addition to those two, you'd only be able to deduct interest on two of them, and would want to pick the two with the largest interest amounts.