Ambiguity in mortgage interest deduction allocation for unmarried co-owners
💸 moneysocial problemSingle report ●●●●●
A taxpayer who co-owns a home with another unmarried individual is unsure how to legally allocate mortgage interest deductions between them when their financial contributions or tax situations differ, noting that official IRS guidance lacks specific rules on whether deductions must be split equally or can be distributed based on actual payments or other arrangements.
What people do today
- Consulting IRS Publication 936
- Attaching explanatory statements to paper tax returns
- Consulting a private tax professional
🔧 Fix this
Ideas a builder, maker or community group could start on:
- A web-based tax calculator that models different deduction allocation scenarios for co-owners based on their respective tax brackets.
- A standardized digital template for a 'co-ownership tax agreement' that helps homeowners document and justify their chosen deduction split for IRS compliance.
- A policy advocacy campaign to petition the IRS for clearer, explicit guidance on non-married joint mortgage interest deduction allocation.
Real voices
“it does not specify how the shares are to be determined”
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