Mortgage interest on a non-reaffirmed mortgage

[laurannm]

Probably a stupid question, lets say you are discharged\closed, and did not reaffirm both your mortgages, but are continuing to make payments and doing a ride-through. Can you still claim the same amount of mortgage interest on your taxes, even though technically you are no longer liable for the mortgage debt?

Also, can I expect the mortgage companies to send me the same tax statement it has sent me in the past?

Thanks

[justbroke]

Probably a stupid question, lets say you are discharged\closed, and did not reaffirm both your mortgages, but are continuing to make payments and doing a ride-through. Can you still claim the same amount of mortgage interest on your taxes, even though technically you are no longer liable for the mortgage debt?

Also, can I expect the mortgage companies to send me the same tax statement it has sent me in the past?

Thanks

You can claim whatever is on your 1098.

Since you will be actually paying mortgage interest, of course you can actually claim it on your taxes. The lender should send you a 1098 showing this anyhow.

[laurannm]

Thanks

That's kind of what I figured, but as usual I way over-think things

[laurannm]

So I did some poking around on the IRS site, and actually called the IRS to confirm. The agent I spoke had no idea what reaffirm meant, but one of the questions she asked was if we were liable for the debt. Since technically we are not liable since we didn't reaffirm, we can not claim the mortgage interest deduction.

[MixerDriver08]

Hey Laura I'm in the same boat. I'm not saying the IRS is wrong but I don't understand why you couldn't. You own your home the mortgage company has an intrest in the property as security on the loan (Lien). I just thought that if you are still paying principle and intrest on it you could still claim it as a deduction...whether it was or wasn't discharged Ya know what I mean?

[TEW]

Well i am going to claim the interest and taxes on my taxes since i paid them.

[laurannm]

Quite frankly, so are we...

I called the IRS back and spoke with a different agent. This one still really didn't know much about reaffirms or BK law. She more or less told me that the mortgage company has to make the determination as to whether or not we are considered liable, and as long as we receive a 1098 form, we can claim it. I just verified with my mortgage companies that 1098s will be sent out

[jessegirl]

If you still make payments then you should be able to claim the interest. I am going to claim it, if i paid it.

[justbroke]

As I posted earlier... whatever is on the 1098, is what you can claim. This is because the 1098 is also sent to the IRS and is indicative of liability for the tax.

[HHM]

Its not a stupid questions, but a few people have made this more complicated than it is.

1. You are making your mortgage payments
2. Your mortgage payment includes Interest
3. abra cadabra, you get to deduct the intersts on your taxes.
Reaffirming or not, has nothing to do with it.

[welovedis]

I was kind of wondering the same thing, we did get our 1099 in the mail yesterday from CitiMortgage. We, however, did say we would reaffirm but have not received any paperwork about it yet. Meeting with attorney tomorrow and that is on the list of questions for him.

[laurannm]

Thanks

If you think of it, can you post back what your lawyer thinks?

I ended up finding several articles that reference the tax code that pertains to mortgage interest. Basically as long your name is on the title and you are the one making the payments, you are entitled to the deduction even if you are not directly liable.

We have Citimortgage as well, who I did call and they mailed out the 1098 form on Jan 6, so I should have it any day now.

I have a feeling that HHM is right...I am probably making this more complicated than necessary

[welovedis]

Thanks

If you think of it, can you post back what your lawyer thinks?

I ended up finding several articles that reference the tax code that pertains to mortgage interest. Basically as long your name is on the title and you are the one making the payments, you are entitled to the deduction even if you are not directly liable.

We have Citimortgage as well, who I did call and they mailed out the 1098 form on Jan 6, so I should have it any day now.

I have a feeling that HHM is right...I am probably making this more complicated than necessary

I sure will, although we haven't been discharged yet and will probably be converting to a 13 case before all is said and done. I'll post back to this thread tomorrow tho!

[anime-chicka]

I just printed up the 1098 from the first mortgage (Countrywide) and received the one from the second mortgage (local credit union). From what I've read, Countrywide will not re-affirm, unless that's changed since BoA took them over. I've yet to get anything from the second, though they promised to send something to my lawyer. He still hasn't received anything yet.

I'm going to need to e-mail him when we get the rest of our tax documents to see how I'm supposed to get a copy of my return to the trustee, and to see if he did exempt my tax return. I didn't see it on the petition, but then again, I don't know what to look for.

[welovedis]

Thanks
Basically as long your name is on the title and you are the one making the payments, you are entitled to the deduction even if you are not directly liable.

The lawyer said pretty much this, so you are entitled to the deduction. HTH!
Karen