Level 5

Solved

Nominee or Split Student loan interest from 1098-E

Forum|Forum|1 year ago
April 10, 2025
2 replies
19 views

Hello community I know we are all tired and need a break. It's coming soon.

I have a question that I have researched and have not been able to find an answer to. If a student took out a student loan and is making payments and the parents are guaranteeing the loan I know that either one can take on their returns as a deduction. But can they split the amount by putting the whole amount on one return and showing less amount belonging to the other with their ss#. The total amount is $2000 and I was thinking if I can do it to take $1000 on each return.

Let me know if anybody has done this and if it is allowed.

Thank you in advance,

John Skouberdis

ProSeries Professional

This topic has been closed for replies.

Best answer by Terry53029

Only one is a cosigner, and they are not legally obligated unless borrower defaults. only the person on the 1098 E is obligated to repay. You cannot split

T

Terry53029

Intuit Community Champion

Don't think you can split it. the student loan interest deduction is tied to the actual borrower and payer of the interest, not the guarantor. If the student is paying the interest, they can claim the deduction, even if the parents are guaranteeing the loan.

J

jskouberdisAuthor

Level 5

Terry 53029,

As long as there is a legal obligation to pay the co-signers on the loan can take the deduction as long as they are obligated to pay. My question was can you split the student loan interest amount if both the student and the parents are co-signers.

John

T

Terry53029

Answer

Intuit Community Champion

Only one is a cosigner, and they are not legally obligated unless borrower defaults. only the person on the 1098 E is obligated to repay. You cannot split

BobKamman

Level 15

Section 221 says that the deduction belongs to the person who paid it. A guarantor who made some of the payments can deduct that share of the interest; a "default" is not required.

An interesting point here is that the $2,500 annual limit on the deduction is not per loan, it is per taxpayer. So if the total interest paid is $5,000 and the parents actually paid half of it, they can claim $2,500 and the student can claim the other $2,500.

"It is what it is" is the phrase I use when someone asks me to define "vacuous," but that's neither here nor there.

J

jskouberdisAuthor

Level 5

Bob,

Thank you for your reply. That seems to be a fitting answer to allow the actual payor of the loan to deduct their share of the interest since they were guarantors and stepped up to the plate after the student was not able to pay. If the student received the total 1099 would you then show the total on the students return and say less amount belonging to guarantor with ss# and pick up guarntor portion with a small explanation on the guarantors return.

Thanks,

John

BobKamman

Level 15

I would ignore the 1098-E except as evidence of total interest paid by both taxpayers. Put the amount paid by the student on the student's return, and the amount paid by the parents on the parents' return.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded