I have two clients who are partners. They each live in the same house, both on title, and both on the mortgage. Also, they have a rental property together.
One of the partners has two children and wants to file head of household with two dependents. The HOH requirement is that the taxpayer provide over 50% of the upkeep on the home. In this case, I would have to file the client HOH, but split the mortgage and RE taxes between them 50/50? And also do the rental 50/50 as well. The other partner that files single without the kids, wanted to take the whole tax deduction on the mortgage interest and taxes, but I was advising they dont do this and they do 50/50 because if they ever questioned the HOH, they would need to everything split, correct?

AtlantaTaxExpert

Jay:

Your are correct about splitting the mortgage interest and R/E taxes equally since they are BOTH on the title and (presumably) both equally liable to pay the mortgage payments. The HoH partner can prove he/she provides over 50% of the child's upkeep by paying for the food. If you need more than 50% for the house, just have the HoH partner claim $1 more on the mortgage interest and R/E tax to meet the "over 50% rule".

Jaykid007

Thanks for taking the time. Always good to get a fellow tax advisor 2nd opinion!

AtlantaTaxExpert

Glad to help!