Can she deduct mortgage interest and r.e. taxes?

[jklcpa]

Married couple with adult son also living at home.  Home is titled solely in husband's name and he died in late 2013 without a will.  Home is now titled in adult son's name. Both mom and son still live there, and mom has lifetime right to live in the home. Mom makes the money and pays the mortgage and real estate taxes.  Son made enough to have to file a return but not much more.  

 

Does mom have a life estate, and does that allow her to deduct the real estate taxes and mortgage interest?

[Elrod]

For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.  

You can deduct real estate taxes imposed on you. You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year. If you own a cooperative apartment,

[gfizer]

Is there any document which gives her the legal right to live in the home for her lifetime or is it just a verbal agreement between mother and son?  How did the real estate come to be titled solely in the son's name after his father's death?  I don't know what the laws of intestate succession are in your state but in Kentucky the spouse and the children each inherit a 1/2 interest in the decedent's property.  I would think if there is a legal grant of the lifetime right to live in the home then she has a life estate ad therefore sufficient interest in the property to deduct the mortgage interest and taxes.

[kcjenkins]

Yes, if she has a lifetime right, she can.  It's called "constructive ownership".

[jklcpa]

She doesn't need an actual document to say that mom has a life estate in the home. It is an operation of the law in Delaware, specifically #3 below. In Delaware if the person dies intestate:

 

SURVIVING SPOUSE (Husband or Wife)/Civil Union Partner

1. The entire estate goes to the spouse/civil union partner if there are no surviving issue or parent(s) of the decedent.
2. If there are no surviving issue but the decedent is survived by a parent(s), the first $50,000.00 of the personal state, plus one-half of the balance of the personal estate, plus a life estate in the real estate, goes to the spouse/civil union partner. The balance goes to the parent(s).
3. If there are surviving issue, all of whom are also the issue of the surviving spouse/civil union partner, the first $50,000.00 of the personal estate, plus one-half of the balance of the personal estate, plus a life estate in the real estate, goes to the spouse/civil  union partner.
4. If there are surviving issue, one or more of whom are not the issue of the surviving spouse/civil union partner, one-half of the personal estate, plus a life estate in the real estate, goes to the spouse/civil union partner.

[jklcpa]

Does this life estate give her the ability to deduct 100% or 1/2 of the mortgage interest and real estate taxes since the son's name is on everything and he lives there too, but doesn't pay a cent?  The deed to the property is now in the son's name, as is the real estate bill. I'll have to ask her about the mortgage because I remember last year she had trouble getting a replacement 1098 because the mortgage co wouldn't talk to her until she sent them proof that she was the administratrix of his estate since her name isn't on any of the home's documents.

[kcjenkins]

100% of what SHE paid.