Can I split the deduction for mortgage interest with my sister even if form 1098 only has my ss#?

Question

My sister and I purchased a new home in 2004. The form 1098 has both of our names as payer/borrower with only my ss#. We've been splitting the mortgage interest deduction, but this year after my sister already filed her 2006 return, someone mentioned to me that I should be the only one to claim deduction for the mortgage interest. I need to file my tax by 10/15/07 and was wondering if anyone can help me out on what to do! p.s. I didn't have enough income to pay mortgage last yr, so my sister paid mostly...

Answer 1

Interest should be deducted by the person who pays it.

See IRS Publication 936 for more details. It says, in part,

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

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 3

Yes, you can split it since you're both on the loan so you're each responsible for the payment. Between you, the total deduction would be the total amount of interest paid. The official "right" way to split it is that each person claims the deduction for the amount they actually paid.

It's also possible for you to claim it all, but only really legit if you paid it. Since she already filed, if you claim it all, she'd have to file an amended return dropping her deduction for her share, and pay back whatever tax benefit she got from claiming her share - doesn't exactly sound fair, especially if she actually paid most of it.

Answer 4

Since your sister has already filed, can you ask her what she claimed? She should have claimed what she paid. If she did not claim some of it, you could claim the rest of it.

Regardless of whose SSN is listed on the 1098, only a person who is obligated to pay and who has actually paid can take the mortgage deduction.

Answer 5

if you are both on the hook, legally, you can split it, but technically, the expense should be split according to who paid which percentage of the mortgage.