As an equitable owner of the home, the son may deduct the mortgage interest [Reg. ยง1.163-1(b); (Uslu, 1997)]. Equitable ownership basically means the taxpayer is living in the home and treating it as his or her own. In this case the mortgage interest can be deducted on Schedule A. The interest would be considered interest not reported on Form 1098 and would go on line 11, not 10.

The son may also deduct the property taxes. Basically, a person owning a beneficial interest in property, who pays taxes on it to protect that interest, may deduct the payment even though legal title rests in another against whom the tax is assessed. (Rev. Rul. 67-21)