Claiming mortgage deduction, but name not on tax form. Will this trigger audit?

Forum|Forum|4 years ago
January 9, 2022
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My husband and I bought a house this year and used my in-laws as co-borrowers. The in-laws are listed as the first two people on the loan, so our tax form shows their names and my father-in-law's tax ID. It does not show any of my information. Other than their names on the loan, they have no involvement in the house. My husband and I pay the mortgage, our names are on the only ones on property deed, etc. My question is, if we claim the mortgage deduction will that trigger a red flag for the IRS since there's nothing on the tax form to indicate it's ours to claim? Is there some other documentation we should include to demonstrate that I am the third borrower on the loan and an owner of the home?

Not A Product Question

GeorgeDenseff

There is no documentation that you need to send with your taxes. You do need to have good records that you can produce in case there are any questions.

krave13Author

Isn't it almost for certain there will be questions then? I'm providing a document that doesn't have my name on it and making a claim against it...

Will I just have to sit on pins and needles every year waiting to see if I get a letter from the IRS or is there some way to head that off by clarifying ahead of time?

Opus 17

Employee

@krave13 wrote:

Isn't it almost for certain there will be questions then? I'm providing a document that doesn't have my name on it and making a claim against it...

Will I just have to sit on pins and needles every year waiting to see if I get a letter from the IRS or is there some way to head that off by clarifying ahead of time?

There's no way to know whether the IRS will pick you for verification. The good news (or at least calming news) is that most of the time, the IRS will send a letter asking for additional documents, and when you respond with your documents and a letter, the matter is closed. Actual audits are extremely rare.

There are a couple of things that will always trigger a letter from the IRS, like forgetting to include a W-2 or 1099-MISC for income. Having a mortgage where you are not the first-named borrower is not one of the things guaranteed to trigger a letter, and we can't really suggest what percentage of the time the IRS might ask for more proof. Sorry.