What would you do?

[Questionguy101]

Interesting scenario:

Boyfriend and girlfriend bought a home together. Both of their names are on the title. But only boyfriend's name is on the loan. The home is the primary residence for both of them. They use money in a joint account to pay for the mortgage. They both put money into the joint account. Boyfriend can only claim 1/2 because he has paid 1/2 (assuming they put the same amount of money into the joint account). Can the girlfriend claim the other 1/2 that she has paid for even if her name is not on the loan. But, like I said, her name is on the title of the house.

[Burke]

If she has a legal 1/2 ownership interest in the house, trust me, the bank will not let her out of paying off the loan should it be sold. She can deduct 1/2 interest. PS: Pls put topic in title of your posts. It helps us out. Tks!

[Questionguy101]

If she has a legal 1/2 ownership interest in the house, trust me, the bank will not let her out of paying off the loan should it be sold. She can deduct 1/2 interest. PS: Pls put topic in title of your posts. It helps us out. Tks!

Burke, thank you for your reply. I have also researched on it and a website cited "title 26 Code of Federal Regulations section 1.163-1(b)". It says "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 I feel comfortable to claim the mortgage interest deduction for the girlfriend now. But still when the IRS computer matches the mortgage interest claimed and the Form 1098 records, they will find the mismatch because her name is not on the loan so no Form 1098 has been issued to her. What's your advice to handle this situation?

[Burke]

It may become a problem in the future as the IRS computers get more sophisticated about matching 1098's. I haven't known them to be that thorough as of yet. If it gets questioned, you can refer them to your cite.

[spencer]

Who has the greater income?

The two together may benefit more by one taking all

[Questionguy101]

The two together may benefit more by one taking all

Actually that's what they want. But I don't want to do that for them because they have told me that the payments are from a joint account and both of them put money into it. So I don't believe it is right for person to claim everything.

[DaveO]

The one not claiming the deduction could consider the payments to the joint account as a gift to the other. Or consider the payments solely for utilities. I have a few same sex couples that own a home together. The higher earning one should take the temized and the other gets the standard dedcuton as a freeby.

[taxea]

His SS will be the only one on the 1098...she will have to prove to the IRS that she paid half...if they ask...she will have a difficult time doing this if they pool the money into one account and then use that money for several different expenses.
Who writes and signs the checks for the mortgage? Is there more money in the account than what is necessary for mortgage and taxes?