IRS Acquiesces in Ninth Circuit View That Home Mortgage Interest Limitation is Applied on Per Taxpayer Basis

In Action on Decision 2016-02 the IRS decided to acquiesce in the result in the case of Voss v. Commissioner, 796 F.3d 1051 (9th Cir. 2015), rev'g Sophy v. Commissioner, 138 T.C. 204 (2012).

The original decision was reported last year on this site (Home Mortgage Debt Amount Limitation Applies on a Per Residence, and Not Per Taxpayer, Basis per Tax Court, But Ninth Circuit Overrules and States It Is a Per Taxpayer Limit).  That case had looked at whether unmarried individuals who jointly owned a residence each were allowed to claim home mortgage interest deductions on up to $1.1 million of debt, or whether that $1.1 million limitation applied on a per residence basis.

Originally this case created uncertainty for taxpayers outside the Ninth Circuit, since it was not clear that the IRS would accept this view.  But now IRS decided to accept the Ninth Ciircuit panel’s decision as the proper one to be used nationwide.

Advisers with taxpayers who applied a per residence limit on mortgage interest deductions in prior years should consider suggesting those taxpayers file claims for refund on those prior years where the statute of limitations remains open.