Divorce and rental properties

[Greg Fischer]

Hi all. Im new to the website and figured this would be a good place to get some information on my situation.

I divorced last year and we agreed to keep our 2 rental properties 50/50 ownership. One is worth more than we paid, the other is worth less and pretty much null eachother out.

How does this affect my income taxes this year filing as single? Do we both get mortgage interest deductions and depreciation?

The one that is worth more than I paid is in a great neighborhood that sees continuous appreciation and is a "perfect" rental home. I dont want to sell it. I guess I could find someone to partner with me and "buy" ot her side? What have other people done in these situations?

The home that is worth less is by approx 20,000. The rent covers mortgage, taxes, insurance and the maintenance, and the tenants have been there for 3 years. I cant take a loss on the home. Should I do some kind of "combined" buy out for both properties where I dont pay her anything and get her off of the title and the loans?

I know I am only giving limited information but Im really trying to find someone that has personally gone through something like this or a legal type that has this experience.

Im more than happy to give more information to anyone that has good information. Thanks

[Bill Walston]

Skeeter, I would have to disagree. Greg says that he was divorced last year so he would not be married as of 12/31/09; he would be single. Accordingly, his filing status would be single, not married filing jointly (or even married filing separately). Sheldon is spot on with his answer about this being treated as though it is a 50/50 partnership.