Tom Healy CPA <tom[at]tomhealycpa.com> wrote:

- quote -

The issue is true (equitable) ownership rather than mere ownership of
record. This issue comes up fairly often in the context of living
trusts.

You might say that living trusts are grantor trusts, so that's not the
same. But in fact when one person is the title owner and another has
an equitable interest, the property is legally held in trust for the
equitable owner, and that will normally be considered a grantor trust.
In most if not all states the law says that any trust not designated as
irrevocable is revocable.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 22, 8:11*pm, "Stuart A. Bronstein" <spamt...[at]lexregia.comwrote:
- quote -

A court case last summer (Njenge v. Commissioner) held that when the
occupant of a home paid all the mortgage and taxes (and upkeep, etc.)
when the home was owned by their son and the mortgage was in the son's
name, merely as a convenience to the occupant because they couldn't
qualify for a mortgage, the occupants were held to be equitable and
beneficial owners of the home and thus entitled to mortgage and tax
deductions.

Note that payment is still key here, but this conclusion was one I
hadn't considered before reading the case.

Tom Healy, CPA, CSA
Boulder, CO

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Mark Bole <makbo[at]pacbell.net> wrote:
- quote -

It seems to me it shouldn't make a difference, except to the extent
that an unmarried person's paying another's share of the mortgage
interest is a taxable gift.

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

D. Stussy wrote:

- quote -

And why or how are the rules different for related people filing
separately, when it comes to the home mortgage interest deduction?
Sorry if I'm being dense...

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:FDrxl.16452$as4.7644[at]nlpi069.nbdc.sbc.com...
- quote -

Marriage makes them related. The original question is about unrelated
owners.

- quote -

Watch out if they're in a common-law marriage state! ;-)

- quote -

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil Marti wrote:
- quote -

OK, that's why I asked. Actually a sentence I didn't quote from the pub
but just now re-read says: "Generally, home mortgage interest is any
interest *you pay* on a loan secured by your home".

The fuzzy parts for me are still

1) when the co-borrowers are married, even if filing separately in a
separate property state, I've recall reading here that they can split
the deduction any way they want (I'll try to find the link if necessary).

2) when co-borrowers pay out of a joint checking account, ditto.

Is there anything stopping one co-borrower from reimbursing the other
for some or all of the interest portion of the monthly mortgage payment?
Or perhaps they could send in two separate checks for each payment,
one for principal, one for interest, or some other split?

Fortunately in the current situation I'm working with, it makes no
difference to the household bottom line which taxpayer claims (or could
have claimed) the mortgage interest deduction or Head of Household
status for that matter, but is the best advice going forward to make
sure there is a paper trail of some kind showing interest payments from
the one who is expected to be in a higher tax bracket in any given year?

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Mark Bole" wrote:

- quote -

How do you reach that conclusion? The fifth and sixth words of that 'graph
are "you pay."

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

There was a thread recently about Sched. A mortgage interest and
office-in-home mortgage interest for unrelated taxpayers who jointly own
and are jointly liable (co-borrowers) for the secured loan (the interest
payment meets all other deductibility tests).

After a false start or two, many stated that a deduction could only be
taken by each for what each one actually paid.[1]

Where does it say this? I haven't tried to search the code yet, but Pub
936 does not state that there is any such restriction.

Regarding the basic requirements, Pub 936 says:

- quote -

Note especially the last paragraph, the only qualification seems to be
that you are legally liable to pay it, regardless of whether you or the
other legally liable person actually paid it. What am I missing?

-Mark Bole

[1] One respondent said a joint checking account would allow that rule
to be ignored. (What about a gift, I wonder?)

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >