If a cosigner begin to pay packet on a loan, can they subtract the mortgage interest on their taxes?
Answers:
Maybe - remember you can only deduct interest for a mortgage on your primary or lower home.
Check with an accountant. Also, see http://www.irs.gov/pub/irs-pdf/p936.pdf
To summarize, the IRS say you can deduct the mortgage interest if you itemize your deductions, you must be legitimately liable for the loan, and the mortgage must be a secured debt on a qualified home in which you have an ownership interest.
So, if you itemize your deduction, if you're legally liable (and a cosigner would be), and if you're on the deed or can show some ownership interest, consequently you should be able to deduct the interest.
Again, read the full IRS publication and, if appropriate, check next to your accountant. Source(s): http://www.irs.gov/pub/irs-pdf/p936.pdf
If the cosigner isn't on the deed, no one can take off the interest. The property owner can't because they didn't pay it; the cosigner can't because they don't own the property.
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