a house, not the mortgage interest
My boyfriend and I bought a house together. He's been making the entire mortgage payments. Do we both have to deduct the mortgage interest on our individual tax returns, 50-50? Or should he deduct the entire mortgage interest amount on his tax return?
When it comes to joint ownership of property, each owner usually
claims his or her share of expenditures paid during the year. For
unmarried taxpayers who share financial interests, this could be
an advantage when structured properly. All single taxpayers are
entitled to a standard deduction of approximately $5,000. If the
taxpayer's itemized deductions, such as mortgage interest and real
estate taxes, exceed the standard deduction, he or she can claim
this higher amount.
For example, let's assume the mortgage interest and
taxes for the year are $10,000. Assuming your boyfriend paid these
in full during the year, he would have $10,000 in deductions on
his tax return and you would claim the standard deduction (assuming
you don't have sufficient itemized deductions on your own). So,
combined, you would have $15,000 in deductions to write off against
If, instead, you each paid half of the taxes and
interest, you each would have $5,000 in deductions for a combined
total of $10,000 in deductions to write off against your incomes.
You don't have to be rocket scientist to know that the former arrangement
is better than the latter.
To maximize this advantage, the partner with the higher
income should be the one to pay the mortgage interest and taxes
and claim them as a deduction in full. I also recommend that the
partner pays the expenses out of a separate bank account to avoid
challenges from the Internal Revenue Service.
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