Warning: Use of undefined constant wp_cumulus_widget - assumed 'wp_cumulus_widget' (this will throw an Error in a future version of PHP) in /home/www/cpa-la.com/wp-content/plugins/wp-cumulus/wp-cumulus.php on line 375
Tax Court Says Limitation on Deductible Mortgage Interest Applies to Unmarried Co-Owners - Emil Estafanous, CPA : Emil Estafanous, CPA

Tax Court Says Limitation on Deductible Mortgage Interest Applies to Unmarried Co-Owners

The Tax Court hold that unwed co-owners were together theme to a $1.1 million extent on personal chateau indebtedness underneath Sec. 163(h)(3) (Sophy, 138 T.C. No. 8 (2012)). The taxpayers had argued that, for unwed taxpayers, any owners should be theme to a apart limit, even yet married taxpayers are clearly theme to a corner limitation.

Sec. 163(h)(3) permits a reduction for seductiveness paid on certain mortgages and home equity loans, though boundary a reduction to seductiveness on a initial $1 million of indebtedness on a debt to squeeze a home, and $100,000 for home equity indebtedness. The government creates it transparent that married taxpayers are theme to a extent jointly; they can concede a seductiveness on a debt adult to $1 million if they record jointly, or $500,000 if they record alone (and an additional $100,000/$50,000 for home equity loans). The IRS’s position has been that unwed taxpayers are theme to a same reduction and that a amounts contingency be allocated between a owners (Chief Counsel Advice 200911007).

The Tax Court concluded with a IRS, observant that Sec. 163(h)(3)(A) defines competent chateau seductiveness as “any seductiveness paid or accrued during a taxation year on merger indebtedness or home equity indebtedness with honour to a taxpayer’s competent residence” (Sophy, trip op. during 8). In addition, merger indebtedness is tangible as any indebtedness that is incurred in “acquiring, constructing, or almost improving any competent chateau of a taxpayer” (Sec. 163(h)(3)(B)(i)(I)). (Similar denunciation is used for home equity indebtedness.) This denunciation suggested to a justice that Congress was directing a reduction during a turn of a residence, not during a turn of a taxpayer.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

Our clients are located throughout Southern California in cities such as Los Angeles, CPA: Whittier, Santa Fe Springs Accounting, Artesia, Cerritos CPA, Bellflower: Tax Preparation, Payroll: Downey, La Palma, Accountant: La Mirada, IRS Representation: Lakewood , Gardena, La Habra, Brea, Rancho Dominguez, Hacienda Heights, Torrance, Diamond Bar, South Bay, Pomona, Carson, Buena Park, La Puente, Orange, Anaheim, Fullerton, Seal Beach, Costa Mesa, Irvine, Garden Grove, Huntington Beach, Santa Ana, Hawthorne, Santa Monica, Montebello, Pico Rivera, Newport Beach, Hollywood, and many more.