Mortgage Interest & Property Tax Deduction

Forum|Forum|6 years ago
November 18, 2019
2 replies
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I am a co-owner of a property (listed on the deed). However, I am not on the mortgage but pay a portion of the mortgage. The property tax on the home is paid through the mortgage company. Would I be able to claim both mortgage interest tax deduction and property tax deduction? Or one instead of the other? The other owner has another home where he maxes out his tax deduction limit and we file taxes separately. Filing together is not an option at this time.

Best answer by TomD8

I transferred it monthly into a joint account that we used to pay the mortgage.

Treas. Reg. §1.163-1(b) provides that even if you’re not directly liable on the mortgage, you can deduct any interest you pay on the debt as long as you are the legal owner of the house (e.g., a deed holder).

https://www.govinfo.gov/content/pkg/CFR-2012-title26-vol2/pdf/CFR-2012-title26-vol2-sec1-163-1.pdf

Since you and she are both on the deed, you can each legally deduct the mortgage interest. Since it was paid out of a joint account, it's up to the two of you to decide what percentage each gets to deduct. Usually in these situations the split is 50/50.

TomD8

Employee

Yes, as a co-owner you may deduct the portion of the mortgage interest and property tax that you actually pay. If you are an owner, it is not necessary for your name to be on the mortgage in order for you to deduct the portion of the mortgage interest that you actually pay.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Russhamy

Another related question.

Girlfriend and I own house can one of us take the mortgage interest write off and one take the property taxes ?

Thanks

ColeenD3

@Russhamy

Yes, as long as you qualify. You have to be liable for the debt and pay the debt. While you may both own the house, only someone listed on the mortgage and actually pays it can claim the expense. In the same way, only the person who actually pays the property tax can claim it.

mei_luu

I have a similar question, where do I report the split % in TurboTax? I can't find a question related to this. Since there is also a loan amount cap for claiming interest, do we split loan amount, interest, and property tax, instead of using the whole numbers on 1098?

TomD8

Employee

Yes, if you and your co-owner are filing separate tax returns you would split the numbers. When you enter the 1098 in TurboTax, check the box that says "the interest amount I entered is different than what's on my 1098". As you proceed another window will open asking you to explain the difference.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.