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Deductions for the Spouse Who Has Moved Out This screen discusses the tax rules for a spouse who owns the home but does not live in it, and pays the mortgage. The tax law here is not entirely clear, but it appears that the spousal home can count as your "second home" for tax purposes (and have interest be deductible). (If you speak with your tax advisor about this, the tax code references are to Sections 163(h)(4)(A)(i)(II) and 280A(d)(2)(C).) If there are no children and your spouse pays you rent, however, the rules become more complicated and it may be that you can not deduct the interest. Note: If you don't own the home, but pay the mortgage under a divorce or separation agreement, you may be able to deduct the entire payment (principal and interest) as alimony. Your spouse will include the payment as alimony income, but your spouse can deduct the interest portion as mortgage interest. Note: If you take out a new mortgage to buy out your spouse's share in a home, you can treat that as debt incurred to buy the home, and so you can deduct the interest as if it had been for the original mortgage.
Disclaimer: We are not giving legal advice. No warranties. We disclaim all legal liability. More...
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