Tax Question (1 Viewer)

[BuffaloSaint]

Hey I know we've got some good accountants on the board and just had a quick question. My fiancee and I bought a house this year together and I just received the 1098 for the mortgage interest but only I am listed on it. Can I still use that on her taxes as I tried to call the bank and they won't change it even though she is listed on the mortgage? I'm trying to put it on hers because she's single and I'm head of household so my standard deduction is higher. Also it doesn't list the Mortgage insurance premium and as I'm reading that's deductible as well.

Thanks for any help.

 

[buzd]

If she is listed on the loan, she should be able to take the deduction. As I understand it, if y'all are equal partners in the loan, each of you needs to take half of the deduction, but perhaps someone can correct me if that's not the case.

 

[LKN H20Girl]

From my experience, as long as only one of you takes the full amount (or both divide it so it equals the total), you can do it either way. For example, in 1999 I bought a house in February and sold it at the end of November with an assumable loan. The person who bought the house got the 1098 in January although I'm the one who paid the interest for all but one month. Talked to her and we divided it out as to who claimed how much.

 

[saintfan]

I am a tax professional. To answer your question, if the mortgage is in both your names, and you are not married, you have some options.

You will have to fill out your returns seperate as single individuals (no Head of Household unless there are dependent children involved). I am assuming that you both would have sufficient deductions to use Schedule A.

1. You can split the 1098 evenly and both can claim the deduction.
2. One of the owners can claim the total deduction while the other elects not to claim it at all.

If, however, the loan is in one name only, only the person who has the mortgage can claim the deduction.

The core issue here is who is listed on the mortgage. If your financee is not listed, she cannot use the 1098. Once you get married you will file as Married Filing Jointly, and the mortgage interest would be used together.

 

[BuffaloSaint]

I actually have a 12 year old dependent so that's why I'm going to be filing as head of household. I don't think that we'll both have enough deductions to both use schedule A as we were only paying mortgage interest for half the year so my plan is to give it all to her. I did some playing around with the numbers on one of the tax calculators and it seemed to be the best way to go. Hopefully we end up with a decent refund because we're getting married in June and the bills for the wedding are stacking up quick.

 

[saintfan]

I actually have a 12 year old dependent so that's why I'm going to be filing as head of household. I don't think that we'll both have enough deductions to both use schedule A as we were only paying mortgage interest for half the year so my plan is to give it all to her. I did some playing around with the numbers on one of the tax calculators and it seemed to be the best way to go. Hopefully we end up with a decent refund because we're getting married in June and the bills for the wedding are stacking up quick.

OK, You would file as Head of Household with the dependent child. She would have to file as single. The standard deduction for a single person is $5,700. If all her deductions exceed that amount, then it would make sense for her to claim the mortgage interest. However, her name MUST be on the mortgage document for her to claim the interest.

The reason I am emphasizing that she must be on the mortgage is that her name is not on the 1098. Usually both names would appear if there were co-owners. However, it is not out of the realm of possibility that the lender left a name off.

 

[BuffaloSaint]

She is. She's actually listed on the other 1098 I received from the company that bought my mortgage but not on the one from the original bank that gave it to us. Talking to them they said that since I was the primary that's the way they did it and they couldn't change it.

 

[saintfan]

She is. She's actually listed on the other 1098 I received from the company that bought my mortgage but not on the one from the original bank that gave it to us. Talking to them they said that since I was the primary that's the way they did it and they couldn't change it.

The reality is that they can change it, but it requires a little bit of effort on their part, and heaven help them if they have to work a little.