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Can I take a deduction on schedule E if the mortgage is on someone else's name

Jersey City, NJ |

I own a two family house, live in one apartment rent the other. Mortgage is on friend's name, title is only on my name.
I pay all expenses since is really my house. I did not qualify for a mortgage at the time.What can I deduct on schE?

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Attorney answers 3


Just because it is under someone else's name does not mean you don't get the deduction. If you make the payment you get the deduction. Keep all of your documents indicating that you made the payment in case you are challenged. It is much easier, however, if your name shows up on the 1098. So, I would encourage you to get things in your name.


You can deduct interest on a debt only if you meet all the following requirements.
You are legally liable for that debt.
Both you and the lender intend that the debt be repaid.
You and the lender have a true debtor-creditor relationship.

You qualify for the deduction if you are legally liable for the mortgage. Please see legal counsel because the answer cannot be given based on this set of facts.

Disclaimer of California Attorney. Laws differ form state to state. Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract.

Good Luck starts with a strategy and a plan.

Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701

Tax Relief Lawyer. Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns, Homeowner Association Strategist.


To deduct interest you have to be liable for the debt and make the payment. Since you are apparently not on the debt you do not meet one of the requirements. You should see a local attorney to determine if you can be added to the debt or made responsible so that you can receive the deduction.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.