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Today TaxMama hears from Tiffany in the TaxQuips Forum who is upset with H&R Block. She tell us “My boyfriend and I own a home. Both of our names are on the deed and on the 2 mortgages we have on the house. We each file our own tax return… Since both of our names are on the forms – can’t we alternate years on who takes the deduction – like 2010 I take it and 2011 he takes it? H&R Block says we can’t do that. If not, can one of us just claim it? ”
Dear Tiffany,
When you are both on title and both on the mortgage, essentially, you’re fine with either of you claiming the deductions.
I say “essentially” because that’s only good until you’re audited.
Then IRS will want to see the source of the payments.
You are not married to each other. You’re not sharing a joint account from which the payments are made. So you may each only deduct the interest that YOU pay.
If you are paying 50-50, that’s the way you’ve got to take the deductions. You can’t just decide, we’ll split it any way we like. If you want your partner to get all the deductions, then all the payments need to come from his bank account. You pay for other things, things that are not deductible – like the utilities, household supplies, food, etc., instead of the mortgage.
When you are not married, you have to plan out your expenses to determine who will get the tax benefits.
Meanwhile, unfortunately, H&R Block is correct.
And remember, you can find answers to all kinds of questions about sharing deductions and other tax issues, free. Where? Where else? At www.TaxMama.com.
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Hi Gregg
Thanks for the suggestion. But I think what they are trying to do is to give each of them the WHOLE deduction every other year. Which would make perfect sense.
Why?
With interest rates as low as they are these days, using half the mortgage interest and half the property tax might not allow EITHER of them to get benefits.
Hi TaxMama, How about if they each wrote a check for half of the mortgage payment each month? Would that solve the problem?
Thanks! Gregg
Hi Florina,
The way they have handled the payments for 2010, he should be taking the deduction for the payments on the 2nd TD since he paid them.
On the first, he paid part of – and can get the deduction for his share.
She paid most of it – and should get the deduction for her share.
(You’re right – they say, it works out to about 50-50.)
There’s more detail in the original question.
http://taxmama.wpengine.com/forum/taxquips/mortgage-interest-property-taxes-real-estate-taxes/
Hugs
Eva
I think that they should split the mortgage interest and property tax down the middle.