Discussion:Mortgage interest deduction
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Discussion Forum Index --> Tax Questions --> Mortgage interest deduction
| 9 January 2007 | |
| I own a house with my parents and I being joint tenants. I'd been making the payments but now I am going back to school and my brother is making the payments. What do we need to do so that he can claim the mortgage interest deduction? Can we just make a change in the deed where we either transfer ownership of one of the persons to him (or just add him to the deed) OR do I have to make a change in the mortgage also? Does he need to be on the mortgage to claim the deduction? | |
Truthseeker (talk|edits) said: | 9 January 2007 |
| See Publication 936, Part 1. | |
| January 9, 2007 | |
| You need to be on the deed to the house, and probably on the mortgage as well, which you might not want to do. And whoever makes the payments in that case is entitled to the deduction. | |
Bottom Line (talk|edits) said: | 12 January 2007 |
| Talk with your lender before you make any changes. You don't want to trigger a "due on sale" clause and then have to look for another loan. | |
| 12 January 2007 | |
| Your brother does not need to be on the mortgage to claim the deduction. He just needs to be on title and making the payments. | |
Kristi1011 (talk|edits) said: | 29 January 2007 |
| What if two people own a home together and are not married can they both claim the interest or only one? | |
| January 29, 2007 | |
| Sure, they can each claim their proportion of the payments.... | |
Kristi1011 (talk|edits) said: | 30 January 2007 |
| ok so what if just one of the owners is claiming the interest statment, does the other have to report it or do they have to split the interest 50/50? | |
| 30 January 2007 | |
| They split the interest in proportion to who made the payments. If I made 7 payments and you made 5, I get 7/12 of the interest. If you paid $2000 a month and I paid $1,000 a month, you get 2/3. If I paid it all, you get nothing (except you got to live in the house without making a payment). | |
| 30 January 2007 | |
| Kevin,
Can the Person A that paid the 5 payments claim that they paid those payments as a gift to the Person B? And then Person B can claim all 12 payments? Probably would work better if Person A gave Person B the money first and Person B made the payments. It's kind of hard for Person A to claim it's a gift when they are servicing a debt against a property that they are an owner of. | |
| 30 January 2007 | |
| I've talked with several tax professionals who have represented clients audited on this issue. It always came down to "did they owe the debt?" and "did they pay it?". You are correct, since the paying owner benefits from the paydown of the loan and not losing the property through foreclosure, it would be hard to say this was a gift. | |
| 30 January 2007 | |
| See Publication 936 page 2 and page 7 | |
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