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Basic Housing Question

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cneller

Junior Member
What is the name of your state?What is the name of your state? Wisconsin


Last year my fiance and I both sold our houses and bought a new house together. What are the laws about claiming mortgage interest, etc. on tax forms given that we paid ~80% of them on our old houses and ~20% (jointly) on the new one? Can we each claim ~10% from the new house or does one person have to claim all of it?

Many Thanks,
-C
 


Some Random Guy

Senior Member
If you are both on the mortgage, and have both been making payments on the house, then you are entitled to claim equal shares of the interest on the new home.
 

abezon

Senior Member
However you can have only 1 person claim the interest. It's generally better to have 1 owner claim all the itemized deductions while the other owner claims the standard deduction. Probably, the first person listed on the loan should claim the interest, but work it both ways. If the secondary owner claims it, be sure you have something written up saying that the second owner pays the mortgage & the first owner pays other types of expenses. Once you get married, you'll itemize together.
 

Some Random Guy

Senior Member
The OP should work the numbers both way but since the lions share of the interest is from their original houses (which I assume they paid separately), they may find that itemizing works best.
 

cneller

Junior Member
Likely we will both itemize this year since, as SRG noted, we paid the interest from our original houses separately. I'm interpreting your comments as mutually exclusive, though: SRG said we are entitled to equal shares of interest and abezon said only one person can claim the interest.

What am I not understanding here? If the interest is $100 total, can I claim $50 and my fiance claim $50 or does one of us have to claim the whole $100 (or is either allowed and we just need to play with the real numbers and see what's most benifitial)?

Thanks again,
-C
 

Some Random Guy

Senior Member
when abezon said "However you can have only 1 person claim the interest" I read this to mean "However, if you want to, you can have only 1 person claim the interest"
 

abezon

Senior Member
cneller said:
What am I not understanding here? If the interest is $100 total, can I claim $50 and my fiance claim $50 or does one of us have to claim the whole $100 (or is either allowed and we just need to play with the real numbers and see what's most benifitial)?

Thanks again,
-C
You can split the numbers any way you like. For example, increase the interest to $10,000. If you each claim $5000, you've managed to match the standard deduction & no one gets any savings from itemizing. If one person claim the $10,000 itemized deductions & the other claims the $5000 standard deduction, the household has paid tax on $5000 less of its income. (Other deductions ignored for purposes of example.)
 

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