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Updated about 5 years ago,

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Lucy Smith
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Marital Settlement Agreement vs. IRS deduction regulations

Lucy Smith
Posted

In a non-traditional arrangement, my Ex-husband and I hold a joint mortgage, post divorce, on the property that I have exclusive use of.  The property will remain jointly owned although I live in it and he does not.  I am solely responsible for all mortgage and interest payments.  Trouble is, in our Marital Settlement Agreement, he demands language entitling him to claim ALL associated mortgage interest deductions on the property.

If I allow this language to stand in the MSA, and if I later simply claim the mortgage deduction on my own taxes (given that I live here and he does not, and I am responsible for all payments) 1) Would the IRS have jurisdiction to decide who claimed the deduction since he would also be claiming the same deduction?  2) Would this work differently at the federal level vs. would the state tax authority likely recognize the MSA and award him the state deduction 3) What legal action could he reasonably take to contest my claiming the deduction, especially if it were to be granted by the IRS and/or the state tax authority?

Thanks.

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