No Mortgage Interest Deduction When Not Legal Owner.

The petitioner's brother owned a home but became unemployed and could no longer make the monthly mortgage payment.  The petitioner's made the mortgage payments for her brother and attempted to deduct the mortgage interest paid for the tax year at issue.  The IRS denied the deduction and the court agreed.  To deduct mortgage interest, the petitioner had to be the "owner" of the home.  The court noted that the petitioner's brother was the sole legal owner of the home under state (CA) law, and the brother was also the beneficial/equitable owner under CA law.  There was no agreement to give the petitioner an ownership interest in the home and the petitioner voluntarily made the payments, never contributed to the down payment and provided no other evidence of any ownership interest in the home.  Puentes v. Comr., T.C. Memo. 2014-224.

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

RSS​ Facebook Twitter