Equity Home Loans

Mortgage Interest Deduction?

I have an odd question about Mortgage Interest deductions. Here's the situation: My step-father was paying on a mortgage, but abruptly had to go abroad to care for his ailing parents. He made no mortgage payments in 2006 at all, nor supplied any income for my mother. My mother had a couple part-time jobs, but could not pay the mortgage. Therefore, the entire year of 2006 I assumed the bill and payed all of the mortgage payments myself. My question is, who deducts the mortgage interest paid? Should it be on her tax return since the mortgage is in her name? Or, should it be on mine, since I obviously paid it. I worry that if I put it on hers, the IRS will wonder how she paid all that interest, when she didn't have even a third of that income. Any thoughts? Thanks...

Public Comments

1. The only person that is eligible to deduct the mortgage interest is the person that is on the mortgage. The mortgage company will send her a tax form at the end of the year that shows how much interest she paid during the tax year. This interest deduction follows the social security number of the borrower. At the closing of the mortgage loan, the borrower fills out a form that makes them eligible to deduct the interest. Although I see your point since you paid the interest throughout the year, I do not beleive you can deduct on your tax forms. Good luck!
2. I would call the IRS and ask them. Most likely there must be some way for you to claim having to financially help out your mother. Look here for contact numbers http://www.irs.gov/ I have called them for other things.. and when you get to stuff like you are asking then can be really helpful.. i mean it
3. Nobody gets the deduction in this case! You are not eligible for it since you are not liable for the loan. Your parents are not eligible for it since they did not actually pay it. Now, here's the real kick in the teeth -- proof positive that no good deed ever goes unpunished: If the total mortgage payments that you made on your parents' behalf exceeds the annual Gift Tax exclusion amount, you owe Gift Taxes for whatever you paid on their behalf.