[publicsafety]

My fiancé and I own a townhome that is in both of our names. Our loan is a 7 year arm broken up into two separate mortgages. Each month, we pay about one thousand dollars for the first mortgage and another four hundred dollars for the second mortgage. Combined, we paid about 13,000 for interest this year. We received two separate 1098s this year, one for the first mortgage and one for the second mortgage. However, only the first mortgage has real estate taxes on it, is this normal? I also worked a lot of side jobs this year that involved the use of several 1099s. I am praying to find the best way to file our home to avoid me having to pay these taxes back. In this situation, what would be the best way to file our home? Should I just claim the home myself to counter-act me owing anything from my 1099s? Somebody told me that only the first person listed on the mortgage can claim the house, is this false? Sorry, to get some thorough answers I wanted to post some thorough questions!

[ebaines]

First - yes it is normal for your property tax to be paid out of only one mortgage - this is your primary mortgage on the property, and is the one that has the escrow account for your property tax payments (and possibly homeowners insurance as well).

It would be most straight-forward to complete your tax return in agreement with the name(s) and SS numbers(s) reported by the two banks on the 1098 forms they sent you. However, you do have the option to split the amounts between your two tax returns, if you are each liable for the payment - the following is quoted from Pub 936:

If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line.

Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. You should let each of the other borrowers know what his or her share is.

I guess the good news for you is that once you and your fiancé are married, this will no longer be an issue!

[publicsafety]

Thanks for responding!

[AtlantaTaxExpert]

Agreed.