Mortgage payment as child support

[oceanlovin'ea]

one of my clients got a divorce last year. They had a mediator and just settled things themselves. An "amicable" divorce! Now they are filing taxes and want me to do them for both of them. They will each claim one child.
He pays the mortgage on the house she lives in. He is still on the mortgage but of course doesn't live in the house. So she just called and her mother told her he can't deduct the mortgage interest because he doesn't live in the house. I told her if he was on the mortgage and the payments go from him to the mortgage company I thought he could claim the interest. (They have not been able to itemize in previous years) I also told I didn't mean to be rude, but her mother is not a tax preparer. If you want to know about taxes, you don't talk to your mother or brother or barber or neighbor. I told her I would check it out.

So if he pays the mortgage on the house directly to the mortgage company instead of giving her child support check and he is still on the mortgage, can he deduct the mortgage interest if it is enough to file a Schedule A?

Thanks

Linda EA

[Burke]

Before stating something categorically, I would want to see the "amicable" agreement, to determine how things were actually set up. It should have been in writing. Child support is neither taxable to the recipient nor deductible by the payer. There is probably no way you are going to make both of them happy. I would be leaning towards her deducting the mortgage interest, taxes, etc.

[Lion]

To deduct mortgage interest, you have to be legally liable to pay it (on the mortgage) and actually pay it. You do not have to live there. You can deduct mortgage interest on up to two houses. You can pick and choose if you pay more than two mortgages. You'll want to see some paperwork: divorce agreement, 1098, etc.

[oceanlovin'ea]

ok. will ask them to bring a copy of divorce papers with him. Actually he is coming this evening so she will have to bring it or he can drop it off later.

Thanks.

Linda, EA

[taxea]

I agree with you need to see the court divorce papers and any/all other agreements made. If he is, in fact, making the mortgage payment in lieu of child support the fact remains that the SSN on the 1099 is the person who takes the mortgage interest deduction. She should be happy with the fact that she is living "rent free" and also should have considered this during the "settlement" so it could be included in the agreement.

[Burke]

The SSN on the 1098 is only one of the legally responsible parties. For joint borrowers, either one can take it if they pay it.