“With all of the above, how should we go about claiming the deductions? “===============As your name is on the deed and you actually paid the interest(up to June of 2012), you can claim the mortgage interest deduction on Sch A; the IRS requires that you actually pay the interest. If your name is on the deed but someone else pays the interest, you cannot deduct the interest. Conversely, you cannot deduct the mortgage interest payments you make if your name is not on the deed to the home. The only way to report your mortgage interest deduction is on a Sch A with your other itemized deductions. However, this doesn't always mean you should itemize just to deduct your mortgage interest. Instead, you should compare the total of all expenses you are eligible to itemize to the standard deduction available for your filing status. If the standard deduction is more, you will always save more in tax with the standard deduction. There is one instance when you are able to deduct condo fees as a valid expense on your individual tax return. That occurs when you use your condo as a rental property instead of a primary home. As a rental property, all fees for upkeep, maintenance and related expenses toward keeping the home rented are deductible on the Sch E. The Sch E is used to claim rental property income during a calendar year.
“We were operating under the assumption that I would claim the interest, and she would claim the taxes, but with further research this probably isn't right.Can it be done that way in the eyes of the IRS if we agree to it? If not can they just be split 50/50 if we agree to it?”======= I don’t think so;UNLESS you are responsible for mort int and pty tax and actually pay the int and tax, you can’t deduct it on your return. Real estate taxes are reported on line 6 Sch A. You can only include the amount actually paid for the year.For your spouse, the mortgage does not need to be in her name, but she must be on title and actually needs to pay it to claim it on her return. |