May My Mother Deduct a Percentage of Interest on My Home?

by Emily Bologna Jones, CPA, MST 

My mother is assisting me in the purchase of a house. She paid 10 percent of the down payment and is paying 10 percent of the mortgage and property taxes each month, which we understand is the minimum she needs to do in order to itemize the taxes and interest. She is also listed as a joint tenant on the loan paperwork. When she files her income taxes, what proof does my mother need in order to claim the appropriate deductions? Does she need a paper trail to the bank showing that she is making part of the mortgage payment? I was planning to have the entire monthly mortgage payment deducted from my account and then my mother would write me a check for the 10 percent she is contributing. Would that be OK?

A homeowner must be legally liable for a home loan in order to deduct mortgage interest and property taxes. If your mother is liable for the mortgage note and she is listed on the title deed, she is entitled to deduct the portion of the tax and interest she pays. There are some cases, however, in which co-owners can deduct more or less, but these require certain written documents. In your situation, your mother may deduct 10 percent of the mortgage and 10 percent of the property taxes. As long as she has copies of the checks she gives you and receipts from you indicating that they were for mortgage and tax payments, she has proper records.

Emily Bologna, CPA, MST, is partner in the form of Moreland & Bologna Accountants. She may be reached at (925) 449-0100.

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