Legal Question in Real Estate Law in California

Re: Who is entitled to tax write off in a Joint tenancy

Since you are on the loan and the title, and you are the one paying the interest (and I assume the taxes), you are entitled to take the deduction for interest and taxes. If your mother does so, too, and she is audited, she would be the one required to adjust her return.

My question is, why are you not refinancing? Interest rates have never been lower, and if you ever need to sell, you will need your mothers blessing. You could probably dramatically reduce your payments.

Food for thought.

Re: Who is entitled to tax write off in a Joint tenancy

The rules on deductibility of mortgage interest are complex. It is not enough that you actually PAID the interest to give you the right to DEDUCT it. Interest paid by a child on a parent's mortgage is not deductible by the child, and vice-versa.

In general, residential mortgage interest is deductible only to the extent that the payer (1) either pays the amount or accrues it as a liability during the tax year, AND (2) the payment or accrual results from a valid and enforceable obligation to pay a fixed or determinable sum of money.

The right to the deduction is not based upon ownership of the home, but upon obligation to pay the interest, i.e. the loan terms.

If the loan obligation is joint and several, i.e. the lender could come after either of you for non-payment, I suppose the deduction belongs to whomever actually made the payments.