JJStephens Posted March 8, 2008 Report Share Posted March 8, 2008 We all run into curious situations that make us scratch our heads and ask 'whose bright idea was that?!?!' This one just came up for me. Clients are a blended family. The mortgage on the home in which they live is in the name of his ex. The 1098 has the ex's name/SSN. She has never lived in that house & has never paid a dime on it; clients paid 100% of the mortgage payments. I don't have a clue why it's in her name. There is nothing in the divorce decree stipulating any of this--best I can figure is that it was an oversight on the part of the attorneys. To make matters even more curious, client is mortgage loan originator and (deep sigh) his current wife is my daughter. I just discovered that they haven't filed for several years because of this and other curiosities--they seemed to be afflicted by the "if we ignore it, it will go away" syndrome (another deep sigh). In any event, my question is: can they take the mortgage interest deduction? Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted March 8, 2008 Report Share Posted March 8, 2008 The norm on this should be the taxpayer whose SS# is on the 1098 gets the deduction. However, the party who actually paid the mortage could take the interest deduction providing the taxpayer whose SS# on the 1098 doesn't take it. Terry D. Quote Link to comment Share on other sites More sharing options...
taxtrio Posted March 8, 2008 Report Share Posted March 8, 2008 Rule #1: You must be liable for the debt to take the deduction, and you must have paid the interest. Question: Is the mortgage in both their names?? Sometimes the 1098 just comes out in one person's name. If your client is one of the borrowers then you can claim it.. but you have to attach a statement saying in wrong name and soc sec #. Quote Link to comment Share on other sites More sharing options...
Julie Posted March 10, 2008 Report Share Posted March 10, 2008 Yes....I often phrase it a bit more simply: To take the deduction, you must OWE the money, and you must PAY the money. It's common for the person with the better credit to be listed first on the mortgage papers, and the bank will often issue the 1098 in that person's name alone. A co-borrower, though, owes the money as much as the primary borrower does, and if he pays the mortgage, he gets the deduction. By the same token, the person who gets the 1098 may not be entitled to the deduction, because he didn't make the payments. Rule #1: You must be liable for the debt to take the deduction, and you must have paid the interest. Question: Is the mortgage in both their names?? Sometimes the 1098 just comes out in one person's name. If your client is one of the borrowers then you can claim it.. but you have to attach a statement saying in wrong name and soc sec #. Quote Link to comment Share on other sites More sharing options...
OldJack Posted March 10, 2008 Report Share Posted March 10, 2008 I like the way you explain things Julie!! Good answer. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.