Monday, August 1, 2016
IRS Acquiesces In Ninth Circuit Decision Giving Unmarried Couples Double The Mortgage Interest Deduction Available To Married Couples
The IRS has issued AOD 2016-02, 2016-31 IRB 193 (Aug. 1, 2016), acquiescing in the Ninth Circuit's decision in Voss v. Commissioner, 796 F.3d 1051 (9th Cir. 2015), which held that the § 163(h)(3) limitations on the deductibility of mortgage interest ($1 million of acquisition indebtedness plus $100,000 of home equity indebtedness) are applied on a per-taxpayer basis (for a total of $2.2 of mortgage debt for unmarried couples), rather than on a per-residence basis (and thus limited to $1.1 of mortgage debt for married couples), as previously argued by the IRS and decided by the Tax Court (138 T.C. 204 (2012)).
The parties in the case were celebrity psychiatrist Charles Sophy and his domestic partner, Bruce Voss, who owned homes in Beverly Hills and Rancho Mirage, California. Prior TaxProf Blog coverage:
- Ninth Circuit Gives Unmarried Couples Double The Mortgage Interest Deduction Available To Married Couples (Aug. 10, 2015)
- 9th Circuit's Mortgage Interest Deduction Decision Adds To Tax Code's Marriage Penalty (Aug. 22, 2015)