My Partner and Bought a Home, Who Can Claim Interest on Taxes?

Question

My partner and I bought a home. We are both on the deed and mortgage, so who gets should claim this on taxes? Can it be split? How? Thanks for answering! Peace.

Answer 1

Anyone who is liable for the debt and who actually pays the interest and/or tax may deduct it.

As a practical matter you can therefore agree to split the cost any way that is most advantageous to you, just by assuring that that person pays it -- whatever other arrangements you make between yourselves.

I have never known the IRS to audit who actually pays; but it's best to follow the rule.

Here's the official instruction, from the publication linked below:

"More than one borrower. If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line.

"Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. You should let each of the other borrowers know what his or her share is."

Answer 2

You must be able to itemize deductions to claim the mortgage interest & property taxes. Next you must meet two requirements. You must be legally responsible for the debt and actually pay it. You mentioned that you are both on the mortgage and deed, so as long as you are paying the mortgage you would take the deduction in the same split as you are actually paying it. If you use a joint account, then you can assume 50/50 (if desired) as long as you contribute at least enough into the account to cover that. If you are legal domestic partners, then you may be filing a joint state return depending upon where you live.

If you want to look at this closer or need professional assistance, please don't hesitate to let me know.

Regards,
Steve

Answer 3

Yes, you CAN split it. But, why do that? Its not necessary as long as you are getting along.

As a couple, you will get a higher combined refund (or owe less) rather than splitting the itemized deductions. One of you, whoever makes more, should claim all of the deductions for the house (interest and property tax) while the other does not claim any of the deductions for the house and just uses the standard deduction for claiming single.

If you run the numbers, you will find that your total tax liability will be less if you file your taxes like that.

Now, if you are not getting along, then don't do this.

Once the refund checks arrive, then you add them up and split them evenly.

Answer 4

You can do it whichever way benefits you both the most. You can split it or let the person with the higher income and higher tax liability tax it all. I work for a tax firm and what we would do is figure yours and your partners with and without it to see who gets the most benefits. I'm assuming when you said partner that you aren't married. If you are married, of course file married filing jointly and claimed the interest together. Don't forgot about your property tax as well! It is deductible on Scedule A as well.

Answer 5

Since both of you bought the home, both of you have the right to split the interest. Whichever serves best. Get an accountant to do this for you or you can do it on self tax tools online.

Answer 6

If you are both on the deed then, by law, you can both claim half of the interest paid.