Today I am off to visit my folks at Assisted Living. Tuesday through Thursday I will be in Atlantic City attending a year-end tax update seminar. While I am gone I have devoted the whole week of posts to ASK THE TAX PRO.
Q. A married couple living apart for all of the year jointly owns the home occupied by the spouse. The spouse pays, from the spouse’s separate checking account, the property taxes. Can the spouse deduct all of this real estate tax when filing under "married filing separately" status?
A. When filing separately each spouse can deduct only those expenses that he/she has actually paid, and for which he/she is legally responsible. Expenses paid from separate funds (i.e. the wife’s separate checking account) are considered to be paid by that spouse, while expenses paid from joint funds (a joint checking account) are considered to be paid equally by each spouse unless they can prove otherwise.
Real estate taxes can only be deducted by the owner of the property. In the case of a jointly-held property, where both names are on the deed, each spouse can deduct the amount of interest that he/she has actually paid. If one spouse has paid all of the real estate taxes from his/her separate checking account then that spouse can claim the real estate taxes.
Similarly, mortgage interest is only deductible by a person who is legally liable for that mortgage. For a mortgage on jointly-held property, where both names are on the mortgage, each spouse can deduct the amount of interest that he/she has actually paid. Again, if all mortgage payments have been made by one spouse from that spouse’s separate checking account then that spouse can claim all the mortgage interest on his/her Schedule A.
I must point out that if a taxpayer is filing as Married Filing Separately and his/her spouse itemizes deductions on Schedule A then he/she must also itemize. In such a situation both spouses must itemize, even if the total deductions of one spouse are less than the allowable Standard Deduction.
I once again refer you to my THE WANDERING TAX PRO posts “JOINT OR SEPARATE? THAT IS THE QUESTION! - PART ONE” and “JOINT OR SEPARATE? THAT IS THE QUESTION! - PART TWO”.
TTFN
Q. A married couple living apart for all of the year jointly owns the home occupied by the spouse. The spouse pays, from the spouse’s separate checking account, the property taxes. Can the spouse deduct all of this real estate tax when filing under "married filing separately" status?
A. When filing separately each spouse can deduct only those expenses that he/she has actually paid, and for which he/she is legally responsible. Expenses paid from separate funds (i.e. the wife’s separate checking account) are considered to be paid by that spouse, while expenses paid from joint funds (a joint checking account) are considered to be paid equally by each spouse unless they can prove otherwise.
Real estate taxes can only be deducted by the owner of the property. In the case of a jointly-held property, where both names are on the deed, each spouse can deduct the amount of interest that he/she has actually paid. If one spouse has paid all of the real estate taxes from his/her separate checking account then that spouse can claim the real estate taxes.
Similarly, mortgage interest is only deductible by a person who is legally liable for that mortgage. For a mortgage on jointly-held property, where both names are on the mortgage, each spouse can deduct the amount of interest that he/she has actually paid. Again, if all mortgage payments have been made by one spouse from that spouse’s separate checking account then that spouse can claim all the mortgage interest on his/her Schedule A.
I must point out that if a taxpayer is filing as Married Filing Separately and his/her spouse itemizes deductions on Schedule A then he/she must also itemize. In such a situation both spouses must itemize, even if the total deductions of one spouse are less than the allowable Standard Deduction.
I once again refer you to my THE WANDERING TAX PRO posts “JOINT OR SEPARATE? THAT IS THE QUESTION! - PART ONE” and “JOINT OR SEPARATE? THAT IS THE QUESTION! - PART TWO”.
TTFN
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