How do I report the mortgage interest and
property taxes on my home?
To claim the deductions for mortgage interest
and property taxes associated with your home, you will need to file Schedule A
and use Form 1040.
If two unmarried people purchase a house
together, how do they handle the mortgage interest and property taxes?
There really isn't an official way to handle
it, as long as you both don't claim the total of it.
In general, if it is paid from
"common" funds, then either could claim all of the deduction or both
could claim a portion. Many couples in similar situations will either allow
the higher income person to take all of the deduction or trade years, one
claims 100% one year then switch.
By splitting the amount between you, the
amounts may exclude both of you from itemizing. If you keep the total amount
applied to one of you, instead of splitting it, at least one of you will more
likely be able to itemize.
If I move in with my daughter, can we share
purchase of a house and both claim it as a primary residence? Do both our
names have to be on the deed or loan? I assume we would only each get a
deduction for the portion of the interest that we each paid individually.
Would my RV still qualify as second home for interest deductions?
Yes to all of your questions. The only
problem is that by splitting the mortgage interest, neither one of you will
probably have enough itemized deductions to get much benefit. From strictly a
tax standpoint, it would probably make more sense for your daughter to
purchase the house and for you to pay her "rent" for your share.
That way one of you would have enough deductions to receive full benefit from
itemizing.
We purchased our house in August. We have
claimed interest already. Can our closing costs be claimed?
"Points" paid at the closing to
secure the mortgage are deductible as mortgage interest. The other expenses
paid at the closing are treated as personal expenses, like fire insurance,
title insurance, etc. or are included in the basis (cost) of the house.
I just purchased a house and am unclear how
to determine the "Points". Can you help?
Points are the main home acquisition fee that
is deductible. Points are defined as a fee that you pay to the bank or
financial institution to acquire a loan at a certain percentage. The points
may be deducted as mortgage interest in the year paid provided that they were
paid out of your "separate funds" and not from the loan itself. Some
times it is called a "loan origination fee". The key point is that
is a fee from the bank and it is not for services rendered to you during the
purchase, but, is in essence prepaid interest.
