Okay, it is week three and the U-haul is loaded and almost to your drive-way. The house is in your name only and your new partner wants to be added to title. What does this mean for you from a tax perspective? If the mortgage is in your name only, but the house is titled to both parties, then the mortgage interest would be 100% deductible for only the person with the legal liability for the mortgage.

If you purchase a home together and both people are on the mortgage and the title, then the interest could be used for the best tax benefit. It is important to note that IRS knows EVERYTHING about you. Properly executing the interest deduction on Schedule A is imperative, or it is likely that you will receive a love letter from IRS.

Before obtaining joint assets it is extremely important to consult with a tax advisor and an attorney for a partnership agreement. There are pros and cons to major life decisions that should be explored while you still like each other!

From week to week I will explore various financial issues for our community. If there is a particular topic you would like discussed, please email me at [email protected].

Mercedes M Pasqualetti is a General Manager with HLM Financial Group and can be reached at [email protected].