MFS splitting Sch A Deductions

[TAG]

I received 3 or 4 CP2000 notices regarding MFS Sch A splits.  What have you found to be effective in preventing these CP2000 time wasters?

 

It's always the mortg. int.

 

 

Terry

 

 

[jklcpa]

I received 3 or 4 CP2000 notices regarding MFS Sch A splits.  What have you found to be effective in preventing these CP2000 time wasters?

 

It's always the mortg. int.

 

 

Terry

 

Is the notice coming to the spouse whose name was not on the Form 1098. If so, did you report it on line 11 as instructed, and not on line 10, and did you indicate and supply the attachment to document the interest?

[TAG]

Thank you jkl.

 

It's normally to the spouse whos SSN is not listed.

[Jack from Ohio]

We are working on our 6th one since May.  The IRS computers can't are unable to link the two. (poor programming)

 

To prevent this in the future:

 

1. Enter the entire amount of interest on the spouse whose SS# is on the 1098 on line 10 of Schedule A.
2. There is a worksheet for line 10 with a section for entering reductions of mortgage interest.  Put the other spouse's name and SS# on that line and enter the amount that will be claimed on the return of that spouse.  This will reduce the interest claimed on the first spouse Schedule A.
3. On the other spouse return, put the interest claimed on line 11 of Schedule A.  There is a worksheet with a place for interest paid where a 1098 was not received for jointly owned mortgage interest.  NOT LINE 10!.  This will satisfy the IRS computers and prevent the CP2000 from being generated.

[TAG]

Thanks Jack.

 

Terry, Also from Ohio.  Port Clinton

[jklcpa]

Jack makes a good point, and the worksheets will help document the deduction split for our purposes, but those worksheets aren't efiled with the return.  Is there a way to document this on e-filed returns so to avoid the notices?

 

The instructions for line 11 specifically say that an attachment is necessary as documentation in this case for a paper-filed return. Since it doesn't specifically address this issue for e-filed returns, I created a document with an explanation of the split and included the scanned Form 1098, and attached this as a pdf to the efile.

 

Specifically, I had 2 new clients last year that purchased a house together, unrelated individuals both filing single, not MFS returns. Both names appear on the Form 1098 but obviously was reported under the first-named's social security number. I efiled the return with the attachment named so to be very obvious as to what it related to, and I haven't received as notice...yet.  I did the same thing in a previous year for a divorcee where the 1098s came in the name of the former spouse. Never a notice there either.

 

Instructions for Sch A, line 11, 3rd paragraph only:

Line 11
If you and at least one other person (other than your spouse if filing jointly) were liable for and paid interest on the mortgage, and the home mortgage interest paid was reported on the other person's Form 1098, attach a statement to your paper return listing the name and address of that person. To the right of line 11, enter “See attached.

 

Anyone care to comment if my attachment will work to avoid the CP2000 on an e-filed return?