both of us (un-married) are on the deed to our 2nd home, but the loan is in my name only. Are we both entitled to the mortgage interest deduction or just me, the loanholder? THNX in advance AND Merry X-Mas to you all!
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a simple matter
Generally you can't deduct interest unless you are legally required to pay it. There is one theory, based on a court case rather different from your situation, that a co-owner must keep up mortgage payments to protect her partial ownership interest.
Usually my clients with such an arrangement will agree that one partner pays the mortgage and the other pays equivalent value in utilities, insurance, and other housing costs. Alternatively they will add the second name to the loan, a simple matter. -
How my client handled it
I have a client who has the morgage in his name, so he takes the related deductions. I calculate his tax, then recalculate it as if he had taken the standard deduction and they then split the amount by which itemizing reduces his tax vs the standard deduction.
To recalculate, all I have to do is enter a negative amount on Sch A to reduce it to the standard deduction, then delete the negaive figure after I get the results.Comment
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