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<p class="MsoNormal">You are correct. If they have elected out of partnership status under section 761 and are truly operating as a tenant in common then they own whatever percentage of the property they are in title to. They independently deduct their actual
expenses paid. So if they paid 20% of the interest, that is what they deduct. I am presuming the deed says a percentage ownership. If it is silent, I believe the default is equal shares. Maybe that is where the CPA’s confusion lies.
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<p class="MsoNormal"><b><span style="font-size:14.0pt">Gourley Law Group<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt">Snohomish Escrow<o:p></o:p></span></b></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold",sans-serif">1002 10<sup>th</sup> Street / PO Box 1091<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial Rounded MT Bold",sans-serif">Snohomish, WA 98291<o:p></o:p></span></p>
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<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Eric Nelsen<br>
<b>Sent:</b> Thursday, September 28, 2017 10:03 AM<br>
<b>To:</b> WSBA Real Property listserve (wsbarp@lists.wsbarppt.com) <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBARP] IRS tax rules say TIC must be equal interests?<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Having a bit of a disagreement with opposing party's CPA about the tax effects of a tenant-in-common ownership between two unrelated parties. For no reason I can discern, the CPA is insisting that the IRS tax/deduction rules (for example,
for mortgage interest deductions, payment of property taxes, etc.) only work if the tenant-in-common interests are equal: that is, 50-50, equal thirds, equal fourths, whatever.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">So far as I know, the deductions are available proportionate to one's interest regardless of whether it is a mathematically equal interest to the other co-owners. If you own a 22.266% interest, then you can deduct 22.266% of the expenses
(assuming that you paid your proportionate share, of course).<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Am I nuts? Is there an IRS code or regulation that requires TIC interests to be equal?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">fax 206-625-9040<o:p></o:p></span></p>
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