Can I share the interest/prop tax deduction with ex?

Question

Our divorce just became final last month. He moved out last year. This entire year to date he has continued to pay 1/2 the mortgage and will until the house sells. In turn, I agreed to split the interest and taxes deduction to benefit him for helping me. It's not in our divorce papers. Will I have a problem with the IRS since the divorce is final and not noted and he doesn't live there?

Answer 1

Depends.

Does your ex pay the money to the bank, or to you? If he pays directly 1/2 to the bank, then no problem.

If the IRS notices (and they receive a copy of your payment data) it will possibly cause some problem for the person who is not on the list. They will want to know. The chances are small, but real, that your ex will receive an "adjustment" letter.

Answer 2

Since you're both on the mortgage and the deed, sharing the deduction is fine.

Answer 3

The only party(ies) who can claim the interest deduction are those legally liable for the loan (borrowers).  The only party(ies) who can claim the property taxes are those legally liable for paying them (parties on the deed).

Answer 4

I don't see anything wrong with you splitting the deductions since you are both paying them and you are both liable on the mortgage.

One caution:  Whose name (and SS#) is the interest being reported to on Form 1098?  That person will claim the interest on Sch. A. on the line that says Form 1098.  The other will claim it on the line below (no need to fill in name, address, etc., since the payments are going to a mortgage company).

Answer 5

It may certainly be problematic for you, especially because divorce greatly complicates tax matters.  Usually taxes don't have to follow your divorce decree as the IRS has their own rules regarding divorce and tax.  I say it will be problematic because all of the mortgage documents and real estate taxes may only have one of your names on them.  If this is the case, one of you will claim deductions relating to documents that are not under your name.  If both of your names are on the documents, then that may not be the case.  If any year was the year for you to see a tax accountant, then this is the year.  I would definitely do so if I were you.  They will be able to give you good advice.