As unmarried individuals, both you and your partner can each deduct the mortgage interest on your respective shares of the home loan, subject to certain limitations. The Tax Cuts and Jobs Act (2017) set the limit on mortgage interest deduction for loans used to buy, build, or substantially improve your main home at $750,000 of acquisition indebtedness for individuals or$375,000 if you're married filing separately.
Since you are unmarried, each of you can potentially deduct mortgage interest on up to $750,000 of the mortgage principal. However, because you co-own the home, you'll need to determine your respective share of the mortgage interest to calculate the deduction.
To do that, you need to check how the mortgage interest allocation has been agreed upon and documented, for example, in the sharing agreement or mortgage statement. After figuring out each person's mortgage interest share, you should be able to determine if you are below the $750,000 limit individually for acquisition indebtedness.
Keep in mind that you'll need to itemize your deductions on Schedule A (Form 1040) to claim the mortgage interest deduction.
Please ensure you retain proper documentation and consult with a tax professional to ensure an accurate calculation and application of the mortgage interest deduction in your specific situation.
The assumption that both people can deduct mortgage interest on up to $750,000 of the principal is likely wrong: if they are co-owners and need allocation, then someone must get a share less than 100% of the $750,000 combined max. Where it says "if you are below the $750,000 limit," It might be better to use the words "allocation limit" to avoid confusion regarding co-ownership. The question is asking for a dollar amount without disclosing the proper details, like the interest rate or allocation percentages or amounts.
