My name is Debbie and I live in Virginia. My daughter and a friend bought a house together 3 years ago. This past February they had a falling out and are now renting the house out. They have a signed lease from the occupants and have a signed partnership in the house where they have agreed to split everything 50/50. Both are on the mortgage. This past week they jointly paid off the equity loan that was against the property. For the past couple of days they have been going back and forth about how to claim the mortgage on their taxes. I want them to go to a tax professional and be honest. My daughter agrees, but her partner in the house wants to claim the mortgage as a regular home loan and not mention the rental. She feels it could have an impact on the type of home loan they have (VHDA) and their home owners insurance. I'm worried they will be audited and this could be seen in a bad light if they do not file property. How should this 50/50 "partnership" be handled?