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  1. #1
    larry59@optonli is offline Junior Member
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    If I have a co-signer on a mortgage...

    What is the name of your state (only U.S. law)? NJ

    The co-signer will not live in the house. I will. Can I deduct the mortgage interest and taxes if I am the only one that pays the mortgage and taxes?

    Thank you
  2. #2
    Banned_Princess is offline Senior Member
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    Quote Originally Posted by larry59@optonli View Post
    What is the name of your state (only U.S. law)? NJ

    The co-signer will not live in the house. I will. Can I deduct the mortgage interest and taxes if I am the only one that pays the mortgage and taxes?

    Thank you
    ** A: Yes.
  3. #3
    larry59@optonli is offline Junior Member
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    I was confused when I read this>>

    This was on another website. Confused me,

    Answer
    Some basic facts:

    1) You cannot deduct any property taxes or mortgage interest unless YOU paid it. If a co-owner or cosigner (or even a complete stranger) paid the taxes or interest you cannot deduct them even though you might be an owner of the house.


    2) There are severe restrictions on an individual's ability to deduct any type of interest payments. As a general rule, an individual may not deduct any interest payments. One exception to this rule is a limited deduction for interest on a qualified residence. The person deducting the interest must be the legal or beneficial owner of the property in order to qualify under this exception. Unless there are other facts not present in the question, the co-signer would likely not be a legal of beneficial owner.

    3) To deduct real estate taxes, the taxes must be imposed on the person taking the deduction. Real estate taxes would be imposed on the owner of the property. The Tax Court has allowed beneficial owners to also claim the deduction (See Trans v Commissioner and Uslu v Commissioner). The co-signer would not be a legal owner and the status of "beneficial owner" is a very difficult one to establish (and we have no evidence the co-signer would qualify as a beneficial owner). Hence the co-signer cannot deduct the real estate taxes.

    Conclusion: Neither the borrower nor the co-signer can claim a deduction.


    Property Tax Attorney
  4. #4
    Gail in Georgia is offline Senior Member
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    What are you confused about? You said you're the one paying the taxes and the mortgage, not the co-signer.

    Sounds like your co-signer was only there because (perhaps) you couldn't have gotten the loan without them.

    Gail
  5. #5
    HomeGuru is offline Senior Member
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    If the co-signor is not paying or taking the deductions, then of course.

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