Dear Tax Talk,
My ex-girlfriend and I purchased a home and have since separated — she lives in another location and refuses to pay any portion of mortgage/house expenses. Formerly, we split the mortgage interest tax deductions 50/50. Can she still claim half the mortgage interest deduction at tax time even though she no longer pays any part of the mortgage/house expenses?
Usually in your situation, I recommend that the highest-earning individual pay the mortgage and claim all the mortgage interest and real estate taxes. When you’re unmarried, each individual has a standard deduction in lieu of itemizing deductions such as mortgage interest and taxes. For simplicity’s sake, let’s say the standard deduction is $6,000 and that your home deductions are $15,000. If you each claim half, you write off together $15,000 in deductions. If instead one claims the home and the other the standard deduction, then your total write-off together is $21,000. The higher-income individual should be the one claiming the home write-off as it should produce a greater tax savings. The other individual balances the economics of the situation by paying other household bills.
Now that she’s moved out, she confronts a couple of problems with the continued write-off. First off, it is no longer her main home or a second home, such as a vacation home. Thus the interest would not qualify as home mortgage interest. Second and foremost, individuals are considered cash-basis taxpayers. An individual can only deduct what he or she pays. Because your ex won’t pay, she’s not entitled to a mortgage interest deduction or any other write-off relating to her former home.
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