Tax Question, I bought a house with my girl friend(soon to be wife) together.?

Question

We bought the house together, title is under both of our name (single man and single woman). But her credit is much better than mine so the mortgage was sole under her name. We both pay the mortgage together (with our join account). My question is, will I be able to claim the mortgage interest for my tax deduction? how about property tax? It is very important since we both work and our real estate agent told us that we both can claim it. However, I am not sure if we can trust our agent with that information. Please help~ Thanks

So if I get marry before end of this year everything will be fine? We will file our tax joinly?

Answer 1

You can not take the interest deduction as you are not legally obligated to make the payments. Also, she cannot take the interest deduction for the portion that you are paying as she is not paying it.

Going forward, she should make all of the mortgage payments out of her funds. Balance it out by you making every other payment around the house.

This issue goes away when you are married. Get married by 12/31/2007 and you won't have any problems.

Note: There is an unwritten and unspoken rule among real estate agents: "Tell them what you have to them to get them to closing." Tax advice from real estate agents is pretty worthless.

Edit:

If you get married by 12/31/2007, you are considered married for the entire year. Then you file a joint return and the issues become moot.

Answer 2

No, you can't claim any of the interest if you aren't on the mortgage, since you are not legally obligated to pay it.

If you're both on the title, you can claim the real estate taxes if you pay them.

In any case, what you understood the real estate agent to say is not correct - you can't BOTH claim them. Under some circumstances you could split the amounts and each claim part, but you can't double up. You're probably ahead anyway if one of you itemizes and claims the expenses, and the other takes the standard deduction, until you get married. Once you are married the issue goes away and you can claim the expenses on a joint return.

Answer 3

It sounds unusual for the mortgage company to allow your name on the deed but not be responsible for the loan.

Get married before the end of the year and you have no problem if you file a joint return. Otherwise, you cannot take the mortgage interest deduction since you do not hold the mortgage.

Answer 4

You are right in doubting your agent. You will have got to dossier individually, of direction, because you're now not married. IRS laws state that YOU won't use the curiosity deduction given that you're now not in charge to pay for it, despite the fact that you ARE purchasing it. Your GF can simplest declare the part SHE paid, because you paid the opposite part. She can't declare an rate which she didn't pay. Since you've got a joint bank account, you'll have to extra verify with the IRS to look if this association makes matters 'authorized' for those deductions. As a ways because the estate tax is going, you'll be able to every deduct your part, because either one of you're obligated, as joint tenants in possession, to pay those taxes.