Thanks for you answer about the name of the co-borrower not having to be on the house title. I am satisfied with that answer.
I was not clear to you about how the 1098 is worded. Both the borrower's and the co-borrower's names are XXXXX XXXXX the 1098, but only the borrower's social security number is XXXXX I'm sorry for the confusion I caused there by not being clear about how the 1098 is worded. So now that I've clarifed that point, should a statement be attached to both returns if it is the co-borrower who itemizes and uses the deduction?
So that brings up the final question since the co-borrower would get a benefit from taking the itemized deduction whereas the borrower doesn't need the itemized deduction (since the standard deduction suffices against the borrower's lower income):
does the co-borrower need to show payments being made directly to the bank from the co-borrower to get the deduction? Currently the co-borrower has been giving the money to the borrower and the payment to the bank has come only directly from the borrower, (who doesn't benefit from the deduction.)
If you say "yes, the co-borrower needs to have paid the bank directly", then we will have to structure the payments directly from the co-borrower in the future to be able to benefit from the deduction on next year's tax
return, and will have to give it up this year, since only the borrower made the payments to the bank in 2008. Do you agree with that conclusion?.
I hope I've been really clear with these final questions. Your answers will directly impact how the two tax returns
will be done.