Other Deduction Questions
Question: My housemate and I, both the legal owners, pay our mortgage from our joint account. The monthly mortgage payment also covers the real estate taxes on our home. The Form 1098 and property tax statement came only in my name and social security number. How do we split these payments of interest and taxes so we can both claim them on our separate Schedules A?
Generally, to deduct an item on Schedule A (Form 1040) (PDF), Itemized Deductions, you must have been legally obligated to pay the expense and the expense must have been paid during the year. Even though two unmarried individuals may both be the legal owners of the home and pay the mortgage equally or from common funds, the lender will normally send out only one Form 1098 (PDF), Mortgage Interest Statement. Additionally, the local taxing authority may only provide a receipt in one taxpayer’s name.
Taxpayers must take care in not deducting the same expenses on two separate returns. They must determine the proportionate share of deductions based upon all facts and circumstances and apply the $1 million and the $100,000 limitations to the entire residence or residences as well as to each taxpayer. If each taxpayer paid one-half of the expenses, then their Schedule A should reflect this. Please attach a statement to both your Schedules A explaining how you are dividing the mortgage interest and payments of real estate taxes. The person, who did not receive the Form 1098, will have to list the mortgage interest they are claiming on line 11 of Schedule A.
As the information reported will not match the records submitted to the Service, please ensure that you keep your records on your split of the deductions for the mandatory review period.
Category: Itemized Deductions, Standard Deductions
Subcategory: Other Deduction Questions