Mortgage Interest Entitlement

[ksstbx]

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

My spouse moved out of the marital home (unannounced) on 1/3/2009. I had been making the mortgage payment all along. I have been paying temporary spousal support since January, 2009. I re-financed the home as of ~8/1/2009 to put it in my name only, effectively removing her from the title deed and the mortgage loan.

She is now claiming that she is entitled to one-half of the mortgage interest from 1/2009 through 7/2009. I have read IRS Publications 504 and 936 and I am still confused. I called the IRS help line, and they were not exactly sure, but said if this was not her permanent address and if she did not contribute to the loan, then she is not entitled to any of the interest for tax purposes.

Is this true?

As a side note, the current Dissomaster submitted by her attorney shows the mortgage interest category split 50-50 in the calculation (as if we were filing jointly). Is it possible that: (a) I will have to pay a retro-active adjustment showing the mortgage interest in "my column"? (if so, that would hardly seem fair that I would have to "pay" for his mistake for not keeping being attentive to the issues), or (b) that since the mortgage interest category was split 50-50, that this would legally give her what she is asking?

Thanks in advance. I hope I made sense.

~ksstbxWhat is the name of your state (only U.S. law)?

 

[Ohiogal]

How did you refinance if there is an open divorce? Did she sign a quit claim deed?

 

[mistoffolees]

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

My spouse moved out of the marital home (unannounced) on 1/3/2009. I had been making the mortgage payment all along. I have been paying temporary spousal support since January, 2009. I re-financed the home as of ~8/1/2009 to put it in my name only, effectively removing her from the title deed and the mortgage loan.

She is now claiming that she is entitled to one-half of the mortgage interest from 1/2009 through 7/2009. I have read IRS Publications 504 and 936 and I am still confused. I called the IRS help line, and they were not exactly sure, but said if this was not her permanent address and if she did not contribute to the loan, then she is not entitled to any of the interest for tax purposes.

Is this true?

As a side note, the current Dissomaster submitted by her attorney shows the mortgage interest category split 50-50 in the calculation (as if we were filing jointly). Is it possible that: (a) I will have to pay a retro-active adjustment showing the mortgage interest in "my column"? (if so, that would hardly seem fair that I would have to "pay" for his mistake for not keeping being attentive to the issues), or (b) that since the mortgage interest category was split 50-50, that this would legally give her what she is asking?

Thanks in advance. I hope I made sense.

~ksstbxWhat is the name of your state (only U.S. law)?

I think her attorney is looking at it improperly. Under IRS rules, the only person who can take the deduction is the person who actually pays it.

I would tell her that she can have 1/2 of the interest deduction if she reimburses you for 1/2 of the interest you've paid.

I don't know what you're referring to in 'my column', but it sounds like they're trying to consider the interest deduction as a property settlement issue. That is incorrect. A deduction can not be considered property. It IS theoretically possible to consider an anticipated tax refund as property, but that's a separate issue. It is also possible to assign who gets a specific deduction in some cases, but that doesn't seem to be relevant here.

 

[LdiJ]

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

My spouse moved out of the marital home (unannounced) on 1/3/2009. I had been making the mortgage payment all along. I have been paying temporary spousal support since January, 2009. I re-financed the home as of ~8/1/2009 to put it in my name only, effectively removing her from the title deed and the mortgage loan.

She is now claiming that she is entitled to one-half of the mortgage interest from 1/2009 through 7/2009. I have read IRS Publications 504 and 936 and I am still confused. I called the IRS help line, and they were not exactly sure, but said if this was not her permanent address and if she did not contribute to the loan, then she is not entitled to any of the interest for tax purposes.

Is this true?

As a side note, the current Dissomaster submitted by her attorney shows the mortgage interest category split 50-50 in the calculation (as if we were filing jointly). Is it possible that: (a) I will have to pay a retro-active adjustment showing the mortgage interest in "my column"? (if so, that would hardly seem fair that I would have to "pay" for his mistake for not keeping being attentive to the issues), or (b) that since the mortgage interest category was split 50-50, that this would legally give her what she is asking?

Thanks in advance. I hope I made sense.

~ksstbxWhat is the name of your state (only U.S. law)?

The IRS agent you spoke to did not give you correct answers.

The rule on mortgage interest is:

1) You had to be legally obligated to pay it, and
2) You must have actually paid it.
3) It must be for your first or second home.

In the case of a married couple, if one spouse pays it, its the same as if the other spouse paid it. In the case of a married couple, its still considered the marital home until either someone refinances or its sold.

Therefore, basically the IRS won't care how you divide it up...so its not a tax issue, as much as it is a divorce/property settlement issue.

 

[nextwife]

As of what date were you legally seperated?

 

[ksstbx]

Hi again,

To answer the questions posed here (sorry, I didn't know how much information was needed):

I filed for divorce in April 2008. I paid all bills, including mortgage since May 2008. To simplify taxes for 2008, we filed jointly, splitting the refund equally. She moved out Jan 3 2009. A quick deed was filed and she signed it. She received an agreed portion of the equity from the transfer of sale to me. I refinanced and put the house and title in my name, effective 8/1/2009.

As for "my column", I was referring to the Dissomaster report for the fields "Itemized Deductions/Deductable Interest Expense" and "Itemized Deductions/Property Tax Expenses". Right now, the expected tax benefit is split evenly on the 'Father' side and the 'Mother' side, even though I pay the mortgage in full (and expect the full tax benefit). To me, this seems like a slip of her attorney, and it should have been adjusted to put all the monies on my side of the equation. My concern was that her attorney may try to collect this difference in support payment for his client "retroactive" to Jan 2009.

~ksstbx