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Posted by Paul Thomas, CPA on June 16, 2006, 2:59 am
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> Alas, my spouse and I are divorcing and this is a
> tax-related divorce question, so I hope it isn't off topic
> for the group. We are trying to get all of our ducks in a
> row and work out an agreeable plan for the division of our
> assets to present to her lawyer, who we hope will do nothing
> more (and charge for nothing more) than guide us through the
> system. Here's one that stumps us: She will retain the
> house. We will both itemize next year and the interest on
> the house payments is enough to be worth looking at. The way
> we figure it, the first six months interest paid in 2006 is
> a joint asset - that is, we should each be able to deduct
> half of that on our taxes next year. How does one go about
> doing this without causing the IRS to go into a fit? Does it
> get written into the divorce decree? The state is OK, if
> that matters.
If both of you are liable for the mortgage payments, and
both of you made the mortgage payments, then you can split
the mortgage interest and property taxes (if paid through
escrow) accordingly.
Keep good records on this up front, because only one of you
will get the 1098 reporting all the mortgage interest, and
the other won't. So get that person a copy of the 1098 for
their records.
Plan on having the IRS contact that person about the
mortgage interest deductions they claimed, because there
won't be any 1098 with their name on it that they see.
--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net
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