Unmarried Couple with Mortgage over 750K - How to deduct the interest correctly?

Forum|Forum|1 year ago
January 27, 2025
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My unmarried partner and I bought a home in 2023 with a >$1M mortgage and split the payments 50/50. Can we claim all interests from this >1M mortgage?

I learned mortgage interest deduction has a limit of $750,000 (2024 Publication 936). It says " You can deduct
home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. ". However it didn't explain how unmarried couple (two single tax payers) should split this.

In short, should I understand this as we each have $750,000 limit, or we each have $375,000 limit?

I did my research online but seems no clear answer. Thanks in advance for any insights!

zomboo

The mortgage interest deduction is applied on a per taxpayer basis, not per residence. Married couples are considered a single taxpayer and the interest deduction on the total interest they paid is split between them by cutting the deduction limit in half. Unmarried co-owners, as individual taxpayers, are each entitled to the $750K limit on the portion of interest they paid. See 'More Than One Borrower' at the bottom of Pub 936 page 8 for instructions on what to do if only one of you received a 1098. The person who didn't receive the 1098 may have to submit a paper return.