Guidelines for Attributing Interest Deductions Involving Joint Obligors

When interest is paid on a home mortgage or similar debt and there is more than one obligor, the following principles should be followed in determining attribution of the interest deduction: (1) payment from a joint account is presumed to be paid equally by each owner; (2) payment from a liable party’s separate fund is paid solely by that party; (3) a party that makes a payment on a mortgage upon real estate he/she owns may take the deduction regardless if he/she is directly liable on the note; and (4) deductions do not need to be allocated to the designated payor on the Form 1098.

See Charles Rubin, “Joint Obligors – Who Gets the Interest Deduction,” JDSupra Business Advisor (December 30, 2014).

Posted by Ryan Moore, Associate Editor, Wealth Strategies Journal

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