divorce and deductions

Alas, my spouse and I are divorcing and this is a tax-related divorce question, so I hope it isn't off topic for the group. We are trying to get all of our ducks in a row and work out an agreeable plan for the division of our assets to present to her lawyer, who we hope will do nothing more (and charge for nothing more) than guide us through the system. Here's one that stumps us: She will retain the house. We will both itemize next year and the interest on the house payments is enough to be worth looking at. The way we figure it, the first six months interest paid in 2006 is a joint asset - that is, we should each be able to deduct half of that on our taxes next year. How does one go about doing this without causing the IRS to go into a fit? Does it get written into the divorce decree? The state is OK, if that matters.

-- John D. Goulden

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Reply to
John D. Goulden
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"John D. Goulden" wrote

If both of you are liable for the mortgage payments, and both of you made the mortgage payments, then you can split the mortgage interest and property taxes (if paid through escrow) accordingly. Keep good records on this up front, because only one of you will get the 1098 reporting all the mortgage interest, and the other won't. So get that person a copy of the 1098 for their records. Plan on having the IRS contact that person about the mortgage interest deductions they claimed, because there won't be any 1098 with their name on it that they see.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

Reply to
Paul Thomas, CPA

I'm going to assume that the divorce will be final in 2006 and that by "next year" you're talking about your 2006 returns.

Piece o' cake. Just follow the Schedule A instructions for claiming interest that isn't reported on a 1098. This assumes that you're in agreement on how to split it. How to memorialize that agreement is a question for your divorce lawyers.

-- Phil Marti Clarksburg, MD

Reply to
Phil Marti

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