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Itemized Deductions Schedule-A


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Old 09-24-2013, 03:37 PM
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Mortgage Interest Amendment

My friend lives with her mom and sister. The mortgage and 1098 is under the mom's name (sisters names might be on deed/title) but the sisters pay all the house expenses(mortgage, insurance, utilities, car insurance, ect). Sister 1 pays 75% of expenses and sister 2 pays 25%. Monthly expense total is transferred into the mom's account and paid from there. For the past few years they have been taking the mortgage interest deduction on the mom's tax return (the interest exceeds her income). Can they amend all their taxes for the last few years and give the deduction to the sisters? How can this be broken down (ie. sister 1 makes alot more, can she take the full amount or do they have to split it based on their payment proportion?)

Thanks in advance



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Old 09-24-2013, 11:03 PM
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Originally Posted by room7 View Post


#1;My friend lives with her mom and sister. The mortgage and 1098 is under the mom's name (sisters names might be on deed/title) but the sisters pay all the house expenses(mortgage, insurance, utilities, car insurance, ect). Sister 1 pays 75% of expenses and sister 2 pays 25%. Monthly expense total is transferred into the mom's account and paid from there. For the past few years they have been taking the mortgage interest deduction on the mom's tax return (the interest exceeds her income). Can they amend all their taxes for the last few years and give the deduction to the sisters?



#2;How can this be broken down (ie. sister 1 makes alot more, can she take the full amount or do they have to split it based on their payment proportion?)
#1; Having their names on the deed to the only satisfies one of the two initial requirements for claiming the mortgage interest deduction; the IRS also requires that they actually pay the mort.interest. If their names are on the deed but they psy the interest, they can deduct the interest payments. Conversely, they cannot deduct the mortgage interest payments they make if their names are not on the deed/ or on the mortgage to the home.So since their names are on the title(or mortgage), they need to file amended returns to deduct their mort payments deductions. They can deduct their mortgage patment deductions on line 11 on Sch A of 1040, so UNLESS they itemize their deductions , they can’t itemize their deductions. The only way to report their mortgage interest deduction is on a Sch A with their other itemized deductions. However, this doesn't always mean they should itemize just to deduct their mortgage interest. Instead, they should compare the total of all expenses they are eligible to itemize to the standard deduction available for their filing status. If the standard deduction is more, they will always save more in tax with the standard deduction.As long as wthey and their mom are both on the mortgage but the 1098 is only issued in their mom’s my name, so, they need to attach a statement to their returns explaining this. They need to show how much of the interest each of them paid, and give the name and address of the person who received the form.







#2;AS mentioned above, They should show how much of the interest each of them paid



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