There may be a way to do this, but it depends on the definition of “liable for.” All of the tax documents I’ve read indicate that multiple individuals can deduct mortgage interest as long as both individuals are “liable for” the mortgage. They do not explicitly state that your name has to be on the mortgage. So if your name in on the deed, are you legally responsible or “liable for” the mortgage? Suppose I die, who has to pay the mortgage? My brother obviously can’t sell the house until the lien is removed, so implicitly, he is “liable for” the mortgage. Please tell me this will work and my problem is solved. Thanks,
Here is the situation. My brother and I bought a duplex. We each own half. We’re both on the deed, but I’m the only one listed on the mortgage. We did this to get a significantly lower rate. My brother lives in one half and I rent out the other. I get a check for rent from my tenant and a check to cover 50% of the mortgage from my brother every month. Works out great except for taxes.
How can I legally avoid paying taxes on my brother’s payments? If I lived on one side and rented out the other, I could deduct all of the the interest (50% as a mortgage interest deduction and 50% as a business expense). Is there any way to do the same thing with my brother? Can I indicate on my taxes that I only own half and have my brother use the other 50% of the mortgage interest as a deduction on his taxes? Any advice would be appreciated. Thanks.