Home Office and Mortgage Interest

My girlfriend and I own our home together. I claim all of the mortgage interest on my return because of the higher savings. She, however, has a home office. Can she deduct the mortgage interest
as part of her home office expense if she does not claim it as a regular mortgage interest deduction?
Thanks.
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in article snipped-for-privacy@4ax.com, Mike at snipped-for-privacy@comcast.net wrote on 3/16/09 4:46 PM:

Whose name is on the mortgage? If it is joint, then each of you can claim whatever you want as long as you paid that much. If you have a joint checking account, then you can split it up any way you like.
You figure the percentage of the house that her office occupies and that is the percentage of the mortgage interest she can deduct, interest only, not principal payments. The rest can go to yours and her Schedules A. You can divide it up but you can't double count it.
Uncompensated advice guaranteed correct or double your money back
Frank S. Duke, Jr. CPA Cincinnati, OH USA
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If both names are on the deed, then each owner is entitled to claim 1/2 of the mortgage insurance . Better do some more reading before 1 party claims all the interest.
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There is not "gimmie" here. You can only take the deduction if you owe the debt AND you paid it. Your name could be on dozens of mortgages, but if you didn't make any payments, you can't take any deduction. Only the person or persons who paid the mortgage - and owes the debt - can take the mortgage related expenses. A parent can, and often does, cosign on the mortgage and gets listed on the home as purchaser with the child. If the child makes all the payments, only the child get to claim the deduction.
So unless they are both on the note, and they split the payments equally, then only the person who paid it can take the deduction. And it will come down to looking at canceled checks if it needs to.
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Good points. In the end, however, partnerships (which this is though that's not what it's called) are allowed to allocate income and deductions in a way that is different than percentage ownership as long as it reflects economic reality. If there are two owners and one makes the entire mortgage payment, I don't see why the payer can't take the entire interest deduction.
Stu
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wrote:

Its important to have a written contract to describe the arrangement on an unequal partnership. This is import for an IRS audit and if a dispute arises later. Most important are the clauses for when something goes wrong like a breakup, job loss, death, etc.
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If she paid it she can deduct it. If she paid none of it, she should not deduct any part of it.
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ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Mike wrote:

I thought your were claiming all of it due to higher savings? How is her claiming any of it going to help (maybe she is self-employed and the self-employment tax effect surpasses your higher bracket)?
BTW, how long has she had the home office? Should she have been deducting it all along as an allowable business expense, including depreciation?
-Mark Bole
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The question is can she claim the mortgage interest as a business expense and not claim it as a normal mortgage interest deduction (because I want to claim it as a normal mortgage interest deduction and I cannot claim it as a home business expense - I have the higher tax rate.) I assume we can split the mortgage interest deduction for our home anyway we want but only she can take the business expense. When we put the mortgage interest in the home office expense in TurboTax for her return, it automatically ALSO put it in the mortgage interest for your home deduction. Home is in both names, joint accounts etc.
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Mike wrote: ...

Again, at most as a fraction of the house that is _DEDICATED_ to the business which one would presume is a fairly small percentage. So, it wouldn't seem advantageous.

...
But you can't claim the same fraction she's claimed nor can she claim even a valid fraction of it as business expense if you've claimed the whole enchilada as personal deduction.
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Mike wrote:

Sounds like a software issue. Try to override the deduction you don't want to apply, in the place where you don't want it to apply.
The person who deducts mortgage interest not reported to that person on a 1098, should indicate so on the tax return.
I don't know of any tax software that applies consistency rules across a virtual MFJ/MFS return which is composed of two separate, filing-status-single (S) returns. Nevertheless, thou shalt not double-deduct (except in certain limited circumstances embedded in the tax law..)
-Mark Bole
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Do you mean, can you write off the entire mortgage interest from your taxes, and she deducts it again as a business expense? No, you can't both write off the same expense, in effect writting it off twice.

She might be able to take a small part of the interest as a business expense - based on the percentage of the house she uses solely and exclusively for business. But not any part of the interest that you take.
She might be able to take a bit of depreciation on the house, but it probably won't add up to a lot. If, for example, she uses one-quarter of the house exclusively for her office, she'll be able to deduct about 1/240th of the original cost of the house to you each year.
Stu
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Stuart A. Bronstein wrote:

More than "might be able", she's expected to (for qualifying business use of home).

Depreciation allowed or allowable, it adds up all the same.
-Mark Bole
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