Mortgage interest statement for surviving spouse

[rose323]

My client's husband passed away in 2018 and the home is now part of her husband's estate. The title is under the surviving spouse's name but not the mortgage form. I see the form still has her husband's social security number. Will I still be able to include the form in her return for tax purposes? Or is there a different process for an estate? 

[jeffmcpa2010]

Who is making the payments?

If she is making the payments, Which are a debt against property she owns (title in her name with a mortgage against it) I would claim the interest on her return. (Don't know if that is totally correct, but it seems reasonable at least.)

If she is not making the payments - not sure, I am having a hard time explaining to my self deducting that the taxpayer is not paying.

[rose323]

Yes she is the one making the payments

[jeffmcpa2010 · Accepted solution]

If I had that situation - She has title to the residence, The Mortgage (in whatever name) is secured by her

residence, and she is making the payments, I am deducting the Mortgage Interest.

But I may put it on a line that doesn't reconcile to the 1098, Like line 8b

[rose323]

Awesome Thank you 

[qbteachmt]

Are you sure she isn't also on the mortgage? Are they going to address this:

"and the home is now part of her husband's estate. The title is under the surviving spouse's name but not the mortgage form"

She is at risk of the mortgage being "called" if this really is a split in the property secured by that debt. That would be a sad surprise.

Or, she is a co-signer and they simply need to change to her info now.

[rose323]

The mortgage form under recipient says "estate of martin vargas". His social is on there as well. I had recently notarized a trust deed in her name regarding the house. I'm fairly new to this part and never dealt with the mortgage under an estate. Is there any questions you might recommend I ask before proceeding to make sure I process her return correctly? 

[qbteachmt]

"Is there any questions you might recommend I ask before proceeding to make sure I process her return correctly?"

It seems this condition should be addressed; it doesn't really affect the income tax filing. You might want to consult with a property law attorney or at the least, a title company that does closings. She won't want to talk to the mortgage provider until she is prepared, in case she gets a due date notice, once they realize the asset isn't held in the same name, now.

[rbynaker]

I don't have an answer but I'm curious.  Does it matter how much of the debt was home acquisition debt vs. home equity debt (now just excess)?

[qbteachmt]

I'm more surprised that a deed was able to be filed without the mortgage company finding out, since they hold the debt secured by that property. Or, it just hasn't made its way through their process, yet.