Hi @jeffmcpa2010  Thanks for throwing a thought out!  The new loan was taken out by sister 1 and the husband of sister 2.  They all live together in the house so they meet the main home requirements.  Sister 1 pays 50% of the mortgage and sister 2 and her husband (joint filers) pay 50% of the mortgage.   My thought is they can split the allowable mortgage interest (which per the example would be 50% of the overall interest).