Tax Tips for Joint Home Ownership
When you own a home in common with another person, the tax payable will depend on a number of factors; including how you hold title to the property, how you file your taxes, and whether you use the property as your primary residence.
Usually under Tenancy in Common, all co-owners are responsible for paying percentages of the real estate taxes proportionate to their share in the property. This means that when it comes to tax deductions, every person will only be entitled to a proportionate percentage of the tax even if they were the ones who paid the whole tax.
It is advisable to go to your local taxing authority in order to determine the one who is liable for the home tax.
Under Joint Tenancy with Right of Survivorship, the person who actually pays the tax will be entitled to get the deductions because the owners have equal liability. However, you need to provide proof that your funds were used to pay the taxes. If you file for your taxes separately, then you will need to make the deductions separately, depending on who paid what.
Another useful tax tip for joint home ownership is to let one owner be responsible for the taxes while the co-owner takes care of other bills associated with the property.
- University of Florida IFAS Extension: http://edis.ifas.ufl.edu/fy446
Trust Basics: An Introduction to the Products and Services of the Trust Industry by Monty P. Gregor, 2003, (page 6).
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