Can Co-Homeowners Claim Deductions?

by Michael Keenan

If you own a home with someone who you're not married to, you're not able to simply deduct all the expenses on a joint return. However, that doesn't mean you have to miss out on your rightful write-offs: You're allowed to split the deductions between the co-borrowers based on how much each paid.

Mortgage Interest

Just because you're a co-homeowner doesn't mean you miss out on the mortgage interest deduction. If you're a co-borrower on a loan, you're allowed to deduct the interest that you paid during the year as part of the mortgage interest deduction. However, the total interest deducted by each of the co-borrowers can't exceed the total paid. For example, if the total mortgage interest paid during the year is $15,000, you can't all claim a deduction of $15,000 each. Instead, that $15,000 must be divided based on who paid the interest. If you split it, each person gets to deduct $7,500.

Reporting Mortgage Interest

How you report the shared mortgage interest depends on whether you received the Form 1098 or not. This form tells you how much total interest was paid on the mortgage. If you received it, you report only the interest you paid on line 10 of Schedule A and simply tell your co-borrowers how much they should deduct. But, if you didn't receive the 1098, you need to report your share of the interest in line 11 of Schedule A and write "see attached" next to it. On the attachment, you must include the name and address of your co-borrower who did receive the 1098 as well as how much each co-borrower deducted.

Property Taxes

Similarly, you're also allowed to deduct the share of real estate taxes you pay during the year. For example, if you split the bill with your co-homeowner and pay a total of $3,500, you can each deduct $1,750. If you pay your real estate taxes through an escrow account, you have to claim the deduction in the calendar year that the taxes are actually paid. For example, if you paid $1,000 into the escrow account in December 2012 for property taxes paid in January 2013, you claim the deduction in 2013.

Warning

The deductions for home ownership are all itemized deductions, which means you can't claim them unless you give up your standard deduction. So, unless your itemized deduction total exceeds the value of your standard deduction, your home ownership deductions become essentially worthless that year. But, you can switch over to itemizing the following year if your circumstances change. Other itemized deductions include write-offs like state and local income taxes, unreimbursed job expenses and charitable contributions.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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