1098-int

[POCAHONTAS]

Client purchased house with father. Client is on the title of the house but not on the mortgage, because he had filed bankruptcy. Client is making the mortgage payments. Can the client deduct the mortgage interest on his return even though his name is not on the mortgage interest statement??

Thank you

[Golden Rocket]

Probably Not

Technically, if one has no legal obligation to pay the mortgage, they would not be entitled to deduct it.

Just because name is not on the mortgage may not mean there is no legal obligation. I can't construct such an example. But I do know that lenders in general don't care
whether multiple names are on the note (in fact, the more the merrier) so long as there is one signee they can go after productively.

[geekgirldany]

Might be a case of equitable owner. There was a post on this a few weeks ago:

http://forum.thetaxbook.com/showthread.php?23612-Mortgage-Interest

[POCAHONTAS]

Thanks guys

[Roland Slugg]

Can the client deduct the mortgage interest on his return even though his name is not on the mortgage interest statement??

Yes. In a 2012 case the court stated that Reg. 1.163-1(b) provides that even if a taxpayer is not directly liable on a mortgage, the taxpayer may nevertheless deduct the mortgage interest paid if he or she is the legal or equitable owner of the property subject to the mortgage. Thus, your client may deduct the mortgage interest he paid, even if it exceeded his proportionate share of the mortgage interest. (Conrad Y. Edosada, TC Summary Opinion 2012-17).

[POCAHONTAS]

Thank you every one