Home Office Deduction

What is the name of your state? Minnesota

I bought a house with a friend as an investment, however only his name is on the mortgage. (probably not smart, but I trust him). Anyway, we split everything 50/50. I am a sole-proprietor who has a home office and would like to deduct part of my rent/mortgage as a business expense. Is there any way to do this if my name is not attatched to the mortgage?

uwbadger said:

What is the name of your state? Minnesota

I bought a house with a friend as an investment, however only his name is on the mortgage. (probably not smart, but I trust him). Anyway, we split everything 50/50. I am a sole-proprietor who has a home office and would like to deduct part of my rent/mortgage as a business expense. Is there any way to do this if my name is not attatched to the mortgage?

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Unless the home is being used for a business purpose (such as renting the home out or using it as a place of business) then the mortgage interest would not be deductible for either of you.

If the home IS being rented out or being used as a place of business etc., then you have a partnership which requires registering as such, establishing an EIN number, and requires different treatment that that of a self employed individual.

You AND your friend need to jointly consult a tax professional. At this point the property belongs to your friend, and the expenses and income are his responsibilty. You would be an investor entitled to nothing more than an eventual return on your investment when you sell the property. However if you properly register your partnership, that could change.