After divorce - House and Taxes

[Strongerlife]

My divorce was final in July. The house was only in his name, however the divorce decree states that I am the one to keep it, pay for it and have roughly 5 years to get it in my name (when my youngest graduates). . So I live there with my kids and pay the mortgage, taxes, Insurance and water as the decree states.

 

Does he get to claim the house? I need to contact an accountant but am curious. We agreed in the divorce to each claim 1 child.

 

Anyone deal with this type of situation?

[PegNosePete]

I need to contact an accountant

You answered your own question.

Internet forum is not the right place for this kind of question.

[afoolto no end]

You need to protect yourself and your family first....good luck

[salparadise]

Five years seems like an odd arrangement... so the deed is in his name, but what about the mortgage? His name or both? I assume his, same as the deed.

 

Claiming the mortgage interest deduction would require that you to have a mortgage I think. However, it's intended to be a tax relief to the person paying all of that interest. Did the court not specify who gets the deductions at the same time they ordered you to make payments on his mortgage? I think this is a legal matter that the court will have to decide if the two of you can't agree on it. Otherwise, I bet it will default to him since it's presumably in his name.

 

Interest rates are rock bottom right now. If I were you, I'd try to get the financing done asap and take full ownership. As it is, if he were to file bankruptcy they'd put you out and liquidate the house. There are other shenanigans that could take place too... like second mortgages, lines of credit or putting it up for collateral.

 

Are you paying the monthly amount to him or to the mortgage company?

[OatsAndHall]

If his name is on the deed than I assume his name is solely on the mortgage. That means that he would be claiming the interest paid. Again, get an accountant.

[carhill]

If you get a 1098 from the mortgage holder/servicer in your name and TIN, you report the mortgage interest deduction. If it's in both your names with only one TIN, and especially if the TIN is your exH's, you'll need to agree as to apportioning and attach a statement to the itemized deductions reflecting that. IRS Publication 936 outlines things in more detail.

 

My exW and I unwound three houses. While the IRS seems like this oppressive weapon of the government to steal your money, most of the time they don't care as long as the paperwork matches up and stuff like you both claiming the full interest deduction and property tax payments doesn't occur.

 

Look at it this way.....if your exH goes sideways and the IRS takes a look, what's your liability here? Tax liability for the contested area? In dollars? If it's big numbers, five figures or more, well you can easily afford a tax professional so go with that. Small numbers they generally don't care about, and will usually send out an inquiry or correction and you can resolve stuff pretty easily. My last contact with them was a correction due to a mistake I made in misapplying a 1040ES to the wrong social (typo on my side). Easy peasy. Unwound it and got it applied and no further issues. I've been doing my business and personal taxes since 1978 and my last return was 158 pages of dealing with their complexities. TBH, if one can read and understand their code and plain English explanations and isn't wealthy (they're more likely to go after wealthy people than we commoners), it's pretty easy, though time-consuming.

 

Kudos to you for resolving your M and keeping a stable home for the kids. That's priceless.